VantageScore 4.0 uses machine learning techniques to develop algorithms for consumers with limited credit histories. These consumers are not scored with other conventional models, which require a consumer to have a minimum of six months of credit history on the credit file or an update to their credit file at least once in the most recent six months.

Strong Risk Management

VantageScore is at the cutting edge of predictive power thanks in part to its highly sophisticated model architecture and its innovative use of data. The VantageScore 4.0 model features the use of trended credit data and machine learning to drive predictive performance. VantageScore provides more precise decisioning enabling more mortgage application approvals while limiting defaults.

More Potential Customers

VantageScore allows lenders to accurately assess approximately 33 million more consumers than with other commercially available models. More than 10 million of these newly scored consumers have scores of 620 and above, and thus are potentially eligible for mortgages.

Closing the Racial Wealth Gap

Home equity is the lifeblood for building wealth in the U.S. economy. With VantageScore, lenders can reach approximately 4.1 million more minority borrowers with credit scores above 620. By providing mortgage finance opportunities to these historically underserved but creditworthy borrowers, we can begin to address the widening racial wealth gap in America.

More Consumer-Friendly

VantageScore has been proud to pioneer the use of rent, telecom, and utility data and the exclusion of medical collection accounts. These consumer-friendly features also help lenders by giving them a more comprehensive and more clear picture of the creditworthiness of their borrowers.

For more information, see Our Models, Key Benefits, and VantageScore 4.0.

When reported to the three NCRAs, all VantageScore models including VantageScore 4.0 use rent and utility payment information in the calculation of a person’s credit score. By using this data, VantageScore is able to increase the amount of information used to assess a person’s creditworthiness and help more consumers access mainstream credit.

For more information, see our White Paper on advantage of adding rent and utility data.

In 2024 VantageScore commissioned a study from global management consultant Charles River & Associates to confirm that VantageScore credit scores continue to be used across the entire lifecycle of consumer lending and across every relevant category.

The report indicated that in the 12-month period between January and December 2023, over 3,400 companies used 27 billion VantageScore credit scores. This is approximately an 42% increase in the number of scores as compared to a similar 2022 study.

More information from the 2023 VantageScore Market adoption study is available here.

For more information on capital markets, see the latest research study conducted by FTI here.

VantageScore has a number of tools that market participants will find helpful to understand the power and potential of VantageScore 4.0.

The first is Inclusion360, the groundbreaking, open access, and interactive analytics platform that uses comprehensive data sets to uncover previously underserved consumers by geographic market. Inclusion360 data helps consumer credit-industry stakeholders gain insight needed to reach creditworthy consumers in U.S. geographies that conventional credit scores would likely restrict.

RiskRatio is a tool that provides lenders and those in the capital markets the ability to view and refresh the relationship between credit scores and default rates (measured by delinquency of 90 days or more over 24 months period) at different points in time for originations, as well as for existing accounts.  By using the tool, stakeholders can see that consumers in the near prime 621-640 credit score band had a 55% decrease in default risk when comparing the sample population from March 2009 (stress period) to March 2020 over the 24 months performance window in each time period. This information provides stakeholders important insights to help manage their portfolio risk.

CreditGauge provides critical insights including the US Consumer average VantageScore® credit score, as well as key consumer credit metrics that underpin the VantageScore® credit scoring model such as delinquencies, balance-to-loan ratios, and new account openings. Consumer credit trends are provided at a national level as well as by generation, income levels and loan types (e.g., credit card, personal loans, auto loans and mortgages).

MarketGain is a leading-edge analysis that provides data and insights to Lenders and Fin-Techs regarding how their specific addressable market could increase with the implementation of VantageScore 4.0.

VantageScore 4.0 is routinely used as the primary credit score to help establish the risk of offerings to the capital markets. In 2024, $13.4 B in ABS offerings have used VantageScore 4.0. This is the largest amount of ABS offerings ever to go to market using VantageScore 4.0 to assess risk, and represents a 17% growth over offerings in 2023 ($11.5B).

For more information on capital markets, see the latest research study conducted by FTI here.

VantageScore 4.0 has been in production since 2017.

VantageScore 4.0 was developed using consumer behavior data from 15 million anonymized consumer credit files obtained from each credit bureau (45 million in total) and assessed to identify whether they ultimately defaulted within 24 months. Predictive data attributes were developed from the credit file, some by using machine learning, and were assessed for their power to assess the likelihood that a consumer may default. Only the most powerful, compliant attributes were used to segment the consumer base and combined to calculate a credit score that accurately ranks consumers by probability of default.

For more information, see VantageScore 4.0 Fact Sheet and User Guide.

As of January 2023, VantageScore will no longer use medical debt or medical collection information in the calculation of VantageScore 4.0 credit scores. As of July 2022, medical collections that are paid or are younger than one year were removed from the credit files. Furthermore, as of 2023 first quarter it is also expected that medical collections with an original amount of less than $500 will also be removed from the credit files. As a result of these reporting changes, 75% of medical collections on file at the NCRAs will be removed. Therefore, VantageScore performed thorough analysis around the impact on model predictive performance and consumer. Given minimal effects on predictive performance and benefits to borrowers, VantageScore decided to remove all medical collections from the VantageScore 4.0 calculations. This decision has been widely supported and the White House has signaled that it intends to remove medical debt from use in all federally granted loan products.

For more information, see our White Paper on medical debt and the changes to VantageScore.

Lenders often work with their credit bureau partners to assess the impact of changing credit scoring model before they complete migration. VantageScore has published whitepapers and factsheets that describe common strategies that lenders follow when they change credit scoring model: Lender Strategies.

To learn more about migration to VantageScore 4.0 and best practices when using a new credit score, download the VantageScore Migration Playbook. Interested in discussing about migration? Contact Us.