Gains in market adoption reflect growing momentum
I am pleased to share exciting news about growth in adoption of VantageScore credit scoring models in the marketplace. We recently released results of a third-party survey that found significant gains in application of the VantageScore 1.0, 2.0, and 3.0 credit scoring models in 2014.
Among the findings:
- Nearly 1 billion VantageScore credit scores were used in the U.S. in 2014.
- Users of the VantageScore model included more than 2,000 lenders and other industry participants, including six of the nation’s 10 largest banks.
- More than 3 billion VantageScore credit scores were pulled in the last year, including scores used for decisioning, model building, and testing purposes.
Compared with 2013, this represents a nearly 600 percent increase in the number of scores used, and a 24 percent increase in the number of organizations using VantageScore models. And these figures don’t even take into consideration a large number of VantageScore credit scores supplied to government agencies.
This growth in the use of VantageScore models verifies lenders’ desire for advanced credit scoring technology that boosts portfolio performance and expands their universe of potential consumers without introducing additional risk.
This expansion also strengthens our argument in favor of the GSEs upgrading their seller/servicer guidelines to accept up-to-date scoring models, such as the VantageScore 3.0 model, that reflect consumers’ current credit behaviors.
It is therefore fitting that the news release announcing these findings includes a quote from Jim Carr, a leading housing-finance, banking, and urban-policy expert, in support of the campaign to end the “GSE lockout” that prevents Fannie Mae and Freddie Mac from accepting loans based on credit scores from all legitimate model developers. Jim’s quote says in part:
“Acceptance of more inclusive credit scoring models has an obvious upside for the GSEs in the form of additional credit-worthy mortgage applicants. Moreover, the housing market and economy in general stand to benefit by the increase in demand for homes by consumers who were otherwise unnecessarily frozen out of the market for all intents and purposes.”
The argument is sound, and growing market adoption adds to our momentum. We look forward to building on that in the months ahead.
Barrett Burns is president and CEO of VantageScore Solutions, LLC.