News Column

VantageScore Solutions Annual Validation Affirms Models’ Predictive Power

July 24, 2014

VantageScore 3.0 Outperforms by an Average of 17 percent on a U.S. Population Representative of Mainstream Lender Portfolios

STAMFORD, Conn.--(BUSINESS WIRE)-- VantageScore Solutions, LLC, the company behind the VantageScore® credit scoring model, announced today the results of its annual validation finding that VantageScore 3.0, as well as earlier VantageScore credit scoring models, continue to be extremely effective risk management tools for lenders.

Specifically, VantageScore 3.0 outperformed benchmark models by an average of 17 percent among consumers in the top 70 percent of the credit scoring range (600-850), which is a population that is representative of mainstream lender portfolios.

Among the other results of the annual model validation, VantageScore Solutions found that:

  • Among credit scores in the mid-40 percent of the scoring range, a lender’s primary risk decision zone of 600 – 770, VantageScore 3.0 outperforms benchmark models by an average of 33 percent.
  • VantageScore 3.0 continues to strongly rank order consumers for all economic quadrants regardless of the extent to which regions are impacted by unemployment and home price depreciation.
  • The VantageScore 3.0 model continues to deliver highly consistent credit scores across all three credit reporting companies with 90 percent of consumers receiving a credit score within 40 points, a spread that represents a doubling or halving of probability of default.
  • VantageScore 1.0 and VantageScore 2.0 also continue to demonstrate a high level of accuracy and consistency and both models also remain exceptional risk management tools.

    “We are extremely pleased with the results of our models’ validations. Today, more than ever, lenders need assurance that the credit score model they use delivers the highest level of performance possible,” said Barrett Burns, president and CEO of VantageScore Solutions. “This information is particularly important from a model governance and transparency standpoint as regulators are keen to see for themselves how a lender’s risk models perform.”

    Detailed results of the validation are available via a recently presented webinar available in the research section of VantageScore Solutions’ website.

    About VantageScore Solutions

    VantageScore Solutions, LLC (www.vantagescore.com) is the independently managed company that owns the intellectual property rights to the VantageScore credit scoring models, including the recently announced VantageScore 3.0 model which provides up to 25 percent predictive improvement over earlier models and has the ability to formulate a score for 30 – 35 million previously unscoreable consumers. Initially developed by America’s three national credit reporting companies (CRCs) — Equifax, Experian and TransUnion — VantageScore Solutions’ highly predictive models use an innovative, patented and patent-pending tri-bureau scoring methodology that provides lenders and consumers with more consistent credit scores across all three national credit reporting companies.





    VantageScore Solutions

    Jeff Richardson, 203-363-2170

    jeffrichardson@vantagescore.com

    Source: VantageScore Solutions, LLC


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