VantageScore Solutions’ recent research shows that consumers are eager for information about credit scores, and that credit scores go up as consumers become more knowledgeable about credit. In this webcast, learn about several resources that your membership can use to increase their knowledge about credit and credit scores.
Launched in 2006 by the nation's three major credit reporting companies (CRCs), the VantageScore® credit scoring model is a pioneering and innovative credit scoring model proven to be highly predictive of credit quality ― providing credit unions with a consistent interpretation of consumer credit files across the three CRCs and the ability to score more people more accurately. This means credit unions can identify and extend credit to more creditworthy borrowers, including the millions of Americans who use credit infrequently, and those who are new to the credit market.
Numerous credit union lenders
have implemented the VantageScore credit scoring model into their risk
management and underwriting processes. In addition to improved accuracy, consistency
and an expanded pool of credit worthy borrowers, credit unions are switching to
VantageScore because its second version, VantageScore 2.0, was built using a
deeper sample size of credit files.
VantageScore 2.0 was built
starting with 45 million credit files, submitted equally by the three national
credit reporting companies. The sample size is taken from recent, multiple
timeframes, that includes a period of unprecedented credit availability prior
to the recession, and the extreme volatility that ensued. By using such a large
sample of data from multiple timeframes, VantageScore 2.0 is able to capture
market conditions and have enough evidence to weight behaviors such that the
algorithm remains predictive in volatile and normalized economic conditions.
Logically, lenders also
appreciate that the VantageScore approach enables the model to be more stable
for longer periods of time. This allows lenders to use the VantageScore credit
scoring model longer, as the natural deterioration that all credit scoring
models inevitably experience is delayed. In other words, VantageScore has
proven to be accurate for longer periods of time.
In conjunction with lender
adoption, the VantageScore model has achieved significant awareness with
federal regulators, including the Treasury Department, Federal Reserve, Federal Housing Administration (FHA),
Federal Housing Finance Agency (FHFA) and National Credit Union Administration (NCUA). Read more about VantageScore in the news.
By using the VantageScore credit
scoring model in a manual or automated environment, in conjunction with other
underwriting criteria, credit unions are assisted with lending decisions and
The following are key breakthroughs that have
encouraged credit unions to use VantageScore credit scoring model in their
VantageScore credit scoring model makes available free research findings and education to help credit unions more effectively use credit scoring.
A credit score is an essential first step in accessing things like credit cards or financing for a car or a home. However, some Americans are deemed “credit invisible” due to non-existent, limited or dated credit histories. These “credit invisible” consumers are either forced to live on cash in a world now built on credit, or they are at the mercy of unscrupulous lenders. Those with a low score may pay higher financing rates or get their loan applications turned down altogether, but having a score to begin with means credit education can help them improve their credit behaviors and, over time, improve their credit scores and access to loans.
This month’s newsletter discusses digital technology, including stories about how lenders are using social media. Specifically, VantageScore surveyed lenders to better understand how they use social media in their day-to-day operations. This newsletter also includes an article about how mobile devices are changing the relationship between consumers and their lenders.
This covers a review of credit score models and changes to
the marketplace of credit scoring, including the increased use of
different models. Finally, it covers the VantageScore Solutions, LLC
credit scoring model and why it is offers more consistent and more accurate predictive
analytics to support lending decisions.
In this issue of The Score,
VantageScore Solutions’ monthly newsletter, you will find a story about
VantageScore recently being designated as NAFCU Services “Preferred Partner”
and content about how some common credit related activities impact one’s credit
score. You will also find a “Five Questions With” column featuring NAFCU
Services’ President, David Frankil, discussing the credit union industry, and
Learn about recent guidance from the OCC regarding model validations and how to perform validations on your own portfolio by watching this webinar. In this webinar, you will get a guideline summary, and learn about validation framework, conceptual soundness, ongoing monitoring, and outcome analysis. This webinar is designed as a way to think about validating credit scoring models.
Read whitepapers about VantageScore 2.0 Model Validation Results in the auto finance industry, credit card industry, and mortgage industry. Among the three major consumer credit industries (auto, bank card and mortgage), the auto finance market withstood the headwinds associated with the recent recession and credit crunch most resiliently.
Often referred to as the "Great Recession," the period between 2008 and 2010 presented an exceptionally challenging environment for U.S. consumers and lenders. In this context, predictive performance of VantageScore® 2.0—already repeatedly validated in times that were economically less challenging - was tested again in a recent study.
Tradelines is VantageScore's biannual magazine covering trends and innovations in the risk management sector. Included are articles about how a new examination manual issued by the Consumer Financial Protection Bureau could impact providers of consumer financial products and services. Also included is a story about new chip and PIN technologies available for debit cards, and an interesting piece on marketing strategies for targeting consumers with differentiating default risks.
View All Educational Resources
In this podcast and presentation from the 2013 NAFCU Annual Conference,
Barrett Burns provides a comprehensive analysis of credit score models
and discusses how your credit union can utilize them for member outreach