on spring shaving and vantagescore 4 0

On spring, shaving and VantageScore 4.0

Date: June 24, 2020

Dear Colleague:

Spring is in the air, the flowers are blooming and (for New Englanders) a welcome warmth finally greets us. It was a long winter for those of us on the East Coast, so you can imagine how excited we are for the months ahead of us…especially with the launch of the much-heralded VantageScore 4.0. There’s been an awakening (and I’m not just talking about the bears in Connecticut that have come out of hibernation).

Speaking of waking up a sleeping giant, I ran across a story that I think you’ll find sounds uncannily familiar. Harry’s, a small but innovative men’s shaving company, found itself a target of an advertising campaign launched by a shaving industry giant (thou who shall not be named). Misinformed ads took aim at Harry’s customer retention. Not only were the ads mean-spirited, but they also were allegedly false. With a lion’s share of the marketplace, this big company took advantage of its industry positioning to derail its competition — competition that is newer, more transparent and, ultimately, will keep the industry on its creative toes. I’m sure you get the gist. Suffice it to say, social media backlash ensued, as consumers online noted the unnecessary bullying of a smaller company.

This pounding of the pavement is what the credit scoring industry needs as well. Competition in the marketplace is at the core of how a market economy thrives. Forget about economic theorists and conjecture. The Harry’s story. Our VantageScore story. This is real life, and the truth of the matter is that without competition there would be little new business, little advancement and little invention. Think of what McDonald’s would be without Burger King, what Coca-Cola would be without Pepsi, what Nike would be without Adidas. The same products and the same formulas would stifle ingenuity and stagnate our economy.

No one knows this better than Ellen Seidman, our “5 Questions” feature this month and a moderator at a panel in which we participated at the Urban Institute, a research organization that brings objective analysis and expertise to facilitate policy changes. The panel discussion revolved around how innovations in credit scoring could open up more opportunities for first-time homebuyers.

In our continual effort to improve, learn and share more about credit scoring, make sure to read about a research study we conducted with MagnifyMoney.com, which highlighted how consumers are using credit cards and how that use impacts their credit scores. Our Did You Know article focuses on the benefits of using trended credit data in credit scoring. Also, check out the latest quarterly results for DefaultRiskIndex.com, a tool we created to accurately evaluate pools of loans using credit scores.

In an industry that had become stagnant, VantageScore’s mission has been and continues to be to bring something new to credit scoring. Like Harry’s, we realize that our competitor’s acknowledgement of the heavyweight ring we’re fighting in is a testament to how much we’ve accomplished and who we are as a company: We are a market disruptor. We believe there is a strong correlation between disruption and innovation for the benefit of consumers and those who use credit scores to accurately and fairly understand consumers.

We hope you enjoy this month’s newsletter and the nice spring weather ahead!

Barrett Burns