VantageScore Solutions Debuts VantageScore 4.0 Credit Scoring Model and Delivers Groundbreaking Industry "Firsts" to Benefit Both Lenders and Consumers

Aligns with National Consumer Assistance Plan to Ensure Fairness While Preserving Accuracy, Pioneers the Use of Trended Credit Data in a Tri-Bureau Credit Scoring Model and Leverages Machine Learning to Deliver Greater Score Accuracy to the Underserved

STAMFORD, CT--(Marketwired - April 03, 2017) - VantageScore Solutions, LLC, developer of the VantageScore® credit scoring models, today announced the completion of VantageScore 4.0, its fourth-generation tri-bureau credit scoring model. The new model takes into account fresh behavioral and product trends and introduces groundbreaking new modeling techniques. VantageScore 4.0 is built on a refreshed data set from all three credit reporting companies (CRCs), compiled of anonymized consumer credit files from the years 2014-2016. VantageScore 4.0 will be available to lenders and other users of credit scores through the CRCs this fall.

"Lenders and other users of credit scores need more out of their scoring models," said Sarah Davies, senior vice president for research, analytics and product development at VantageScore Solutions. "In VantageScore 4.0, we've developed a tool that provides benefits associated with portfolio growth, consumer fairness, inclusion and model governance. These are areas of concern for lenders and their regulators as well as consumers and those who advocate on their behalf."

VantageScore 4.0 is the first tri-bureau credit scoring model to be built in anticipation of the data suppression associated with the CRCs' National Consumer Assistance Plan (NCAP) and their efforts to make credit reports more accurate, transparent and understandable. It is also the first tri-bureau credit scoring model to incorporate trended credit data attributes. In addition, VantageScore 4.0 leverages machine learning techniques in the development of scorecards for consumers with sparse credit histories.

The new model builds on the successful roll-out of VantageScore 3.0 in 2013, which, among many innovations, introduced an enhanced ability to score more consumers and provided improved transparency and consistency of scores across all three CRCs.

VantageScore 4.0 offers predictive performance lift across all credit industries. In particular, the incorporation of trended credit data across an expanded applicant pool, and the 5.4 percent lift in predictiveness associated with mortgage origination, positions VantageScore 4.0 as an ideal tool for the mortgage market, in which only outdated FICO models are currently accepted as the result of an effectively government-sanctioned monopoly.

Model Aligns with National Consumer Assistance Plan's Expected Changes

According to its website, NCAP is "an initiative launched by the three nationwide consumer credit reporting companies -- Equifax, Experian and TransUnion -- to make credit reports more accurate and make it easier for consumers to correct any errors on their credit reports."

As the CRCs roll out improvements under NCAP, tax lien and public records data that historically was used to calculate consumers' credit scores likely will be eliminated entirely or in part.

With those changes in mind, VantageScore 4.0:

  • Distinguishes medical collections from other types of collection accounts, ignores medical collections less than six months old (to allow time for insurance-payment processing) and penalizes medical collections less than non-medical ones.
  • Relies less on derogatory collections and public-records data to ensure that the model will not lose substantial predictive strength in the likely event that these records fail to meet enhanced data quality standards and are removed from consumer credit files under provisions of the NCAP program.

The introduction of VantageScore 4.0 further underscores that lenders should evaluate how their incumbent models perform with and without NCAP data to determine whether there is detrimental impact on predictive performance and approved populations.

Trended Credit Data Drives Significant Performance Improvements

VantageScore 4.0 is the first tri-bureau credit scoring model to incorporate trended credit data. This data tracks the trajectory of borrower behaviors as opposed to capturing static events. The new model applies VantageScore's patented characteristic-leveling processes to these attributes, preserving unequaled score consistency across all three CRCs.

The usage of trended credit data attributes has led to a very substantial lift in predictive performance in the Prime and Superprime credit bands, including a predictive lift of nearly 20% for originations among Prime consumers.

Machine Learning Delivers an Even More Accurate and Inclusive Scoring Model

VantageScore 4.0 scores some 30-35 million consumers who cannot obtain a credit score when conventional scoring models are used. To further enhance the accuracy of scores assigned to this population, VantageScore 4.0 model developers leveraged machine learning techniques in the development of scorecards for those with sparse credit histories (i.e., those with no trade lines or credit accounts).

This has led to a performance lift of 30 percent among the population of consumers with sparse credit files. This innovation further bridges the gap between access to mainstream credit and those consumers without deep credit histories who have traditionally been frozen out of lenders' automated underwriting systems.

"VantageScore 4.0 benefits from the most recent, cutting edge model development and data mining techniques available, yet it retains all the features that lenders, consumers and advocates gravitated towards in our earlier models as well," added Ms. Davies. "When you think about where the consumer credit industry is headed, with the greater need for an expanded universe of applicants, and a heightened sense of fairness and transparency, VantageScore 4.0 is extremely timely. We look forward to making it widely available later this year."

About VantageScore Solutions

Credit scores can impact many aspects of your life, everything from whether you are able to get a loan and how much interest you will have to pay to whether you are able to rent an apartment.

VantageScore Solutions, LLC ( is the independently managed company that owns the intellectual property rights to the VantageScore credit scoring models and is the leader in scoring innovation. Recently introduced VantageScore models score 30-35 million consumers who typically are not scored by conventional models without relaxing standards. VantageScore credit scores are used by lenders, landlords, utility companies, telecom companies and many others to determine your creditworthiness. By using the VantageScore model, these enterprises have access to many more consumers, and in turn, consumers have greater access to mainstream credit.

While there are many credit scoring models in the industry, the "win-win" for VantageScore is its innovative, highly predictive, patent-protected, tri-bureau scoring methodology that provides lenders and consumers with more consistent credit scores across all three national credit reporting companies. VantageScore is also the model tens of millions of consumers use to monitor their credit behaviors through dozens of websites and lenders who provide their users and customers with their VantageScore credit scores for free. More than eight billion VantageScore credit scores were used in the 12-month period from July 2015-June 2016 by over 2,400 lenders and other industry participants, including 20 of the top 25 financial institutions -- an increase of nearly 40% over the previous 12-month period.

The company is celebrating its 11th anniversary in 2017.

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Contact Information:

Jeff Richardson
VantageScore Solutions

Sarah Davies, Senior Vice President, Analytics, Product Management and Research at VantageScore Solutions