UPDATED to include the latest 2020 innovations:
From 1987, when the first generic credit scoring models were introduced, through 2005, the credit scoring industry was dominated by asingle company with little incentive to innovate. The arrival of VantageScore Solutions in 2006 brought competition between developers thathas fueled innovation and benefitted both lenders and consumers.
Global management consulting firm Oliver Wyman 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 of 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.
Among Oliver Wyman’s other findings include:
- 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.