VantageScore usage continues to surge
As we enter autumn, the season of abundance, I’m happy to report a rich harvest of VantageScore usage over a 12-month period in 2015-16.
Our annual usage survey revealed that more than 8 billion VantageScore credit scores were used in the 12-month period from July 2015 through June 2016. That’s an increase of nearly 40 percent over our record-high usage of approximately 6 billion scores in the comparable period of 2014-15.
The number of lenders and other industry players also rose significantly, to more than 2,400, up from just over 2,000. Among those users are 34 of the country’s 50 largest financial institutions.
We’re proud of that growth and what it says about lender confidence in the VantageScore model’s predictive power, its unsurpassed ability to deliver consistent scores across all three credit bureaus, and its ability to accurately score more consumers than any other generic credit scoring model without lowering credit standards.
We are pleased that lenders and other financial institutions are using VantageScore models in a host of ways. In addition to loan decisioning, scores play important roles in marketing, underwriting, pricing, portfolio management, model building, testing and validation.
We are also proud that tens of millions of consumers are now monitoring VantageScore credit scores that they receive online for free. Lenders such as Capital One, whose CreditWise service is powered by VantageScore from TransUnion, and a growing number of direct-to-consumer services offer subscribers free scores, using the same VantageScore model lenders use. Tracking their free VantageScores is an important step for many consumers who seek better financial health and credit habits.
While we are extremely grateful for this tremendous growth in usage of VantageScore credit scores, it is important to note that the surge could have been far greater if VantageScore were not locked out of the largest asset class in the country (and, indeed, the world): the U.S. home mortgage market.
Both Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) responsible for securitizing the vast majority of all U.S. home loans, have long included in their seller-servicer guidelines a requirement that lenders submitting loans to them for purchase using their automated underwriting portals include a credit score calculated using an outdated credit scoring model developed by VantageScore’s chief competitor.
We believe strongly that mortgage lenders should have choice in validated credit scoring models. Credit scoring competition will benefit consumers, lenders, investors, the GSEs and taxpayers alike. VantageScore continues to work with key industry participants, including lenders, advocacy groups, regulators and legislators to correct this virtual monopoly and to facilitate competition among credit-score developers in the mortgage market.
We thank you all for your support and for helping make this another bumper-crop year for VantageScore.
All the best,