SURVEY: Broad consumer support for credit-scoring competition
A survey commissioned by VantageScore Solutions found that U.S. consumers want to see the credit scoring industry shift away from dominance by one developer to a marketplace characterized by competition and innovation.
Among the survey findings, which are summarized in a downloadable infographic, are:
1. Consumers across the board understand that they have multiple credit scores; and
2. Consumers view the existence of multiple scores as a positive.
The phone survey, conducted with a representative sampling of more than 1,000 consumers, found that the majority of U.S. consumers support newer methods of calculating credit scores and that most Americans also support competition among developers of credit scoring models. Respondents voiced approval for multiple features of modern credit scoring models, including recognition of positive payment histories for rent, utility, and telecom bills.
The survey oversampled the millennial population (consumers aged 18-34) to help industry participants better understand and serve their credit needs.
More specific findings include:
- A plurality of the national population (49 percent) and a slight majority of millennials (51 percent) believe that rent payments should be factored into credit scores, rather than consigned to separate specialty scoring models (38 percent and 40 percent, respectively).
- Across the board, consumers take a positive view toward having multiple credit scores from different models. In fact, only 4 percent of U.S. consumers who have been scored using more than one credit scoring model viewed having multiple scores negatively, while over 55 percent characterized the trend as positive.
The survey also explored the extent to which consumers may be positively impacted by credit scoring models that exclude paid third-party collection accounts. Approximately 5 percent of Americans report that they have had a paid-off collection account (an estimated 12 million). Those paid-off collection accounts are excluded from consideration in VantageScore 3.0., VantageScore Solutions’ latest credit scoring model.
Millennials believe that being unscorable is an obstacle to their credit access
Additional findings specific to the millennial population segment include:
- 48 percent of millennials said the reason they could not obtain credit is because of a lack of credit history as a young adult.
- Among those who at one point were unable to obtain a credit score, the most common detriment was their inability to obtain a credit card.
- 42 percent of millennials said that their limited credit history resulted in their inability to obtain the credit they needed.
“The results of this survey clearly demonstrate that consumers prefer competition in the credit scoring marketplace, and that they welcome the important innovations that VantageScore has delivered to a market that previously lacked the motivation to better serve lenders and consumers,” said Barrett Burns, president and CEO of VantageScore Solutions. “Our model provides a highly accurate credit score along with important benefits for consumers and lenders, which ultimately helps to match consumers to the right types of credit products and credit granters.”
The survey was conducted by FTI Consulting and commissioned by VantageScore Solutions. Survey questions were delivered via telephone. The audiences included a national sample of 1,000 U.S. adults over the age of 18 and an additional oversample of millennials (aged 18 – 34). The survey was fielded between July 28 and August 16, 2015.