Market Adoption: 12.3 Billion & Counting
VantageScore Solutions Announces Score Use Grows to More than 12 Billion
New research from global management consulting firm Oliver Wyman finds a total of 12.3 billion scores were used across consumer credit loan categories, an increase of 20 percent over usage in the prior year.
VantageScore Solutions, LLC, developer of the VantageScore credit score model, announced the results of a study conducted by global management consulting firm Oliver Wyman that examined how many VantageScore credit scores were used in a 12-month period between 2018 and 2019, as well as by which types of consumer lenders.
Overall, the study found that 12.3 billion VantageScore credit scores were used, a 20 percent increase in usage over the prior year. Since June 2015, VantageScore usage has grown approximately 20% per year.
The Oliver Wyman analysts found that usage was widespread across credit loan categories, including credit card, auto finance, and personal loans as well as in functions where credit scores are often used, including pre-screen, marketing, origination, and underwriting and portfolio management.
Usage of VantageScore credit scores is widespread across all major consumer lending categories with the notable exception of the mortgage market, where FICO scores are currently required by both Fannie Mae and Freddie Mac during the initial screening of mortgage applicants when using their automated underwriting processes.
The Federal Home Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, has issued a new rule that might open the mortgage market and would facilitate competition among credit score model developers in that arena.
“The continued surge in usage of VantageScore credit scores is a testament to an increasingly competitive marketplace for credit scores as well as the VantageScore model’s accuracy and inclusivity,” said Barrett Burns, President and CEO of VantageScore Solutions. “Consumer lenders are hungry for new and innovative approaches to consumer credit underwriting and clearly favor a competitive market that casts a wide net for scoring potential applicants in a safe and sound manner.”
Among Oliver Wyman’s other findings:
• Credit card issuers and banks and thrifts accounted for over half of all usage of VantageScore credit scores.
• Over 3 billion VantageScore credit scores have been provided to consumers to empower them to practice good credit health habits, and nationwide most consumers use VantageScore credit scores as a proxy for how a lender might interpret their creditworthiness.
• Nine of the 10 largest banks and 29 of the 100 largest credit unions used VantageScore credit scores in one or more lines of business.
“Having compiled this report for the third year in a row, we see impressive gains in market usage of VantageScore credit scores,” said Peter Carroll, partner at Oliver Wyman. “Notably, we observed growth in particular amongst lenders using VantageScore for origination and other credit decisions, which demonstrates that lenders don’t appear to be as tethered to legacy processes as they once were.”
To download the full market adoption report, visit www.vantagescore.com/adoption.