The VantageScore 3.0 model sets a new standard for inclusiveness with its ability to provide a credit score for an additional 30–35 million consumers who are unable to be scored using traditional models. That expands the scoreable universe by a number of adults greater than the entire population of Texas.
A hallmark of the VantageScore model is its unique ability to score more people. Indeed, the launch of VantageScore 1.0 in 2006 challenged the industry standard by allowing greater access to mainstream credit to those who are excluded by traditional credit scoring approaches.
The VantageScore 3.0 model and its unique design dramatically increase the number of consumers who can be scored. Features of the model that enable lenders’ vast expansion of their customer base include:
All VantageScore models expand the trade update criteria from six months—used by traditional models—to 24 months, allowing people who may have been “out of the credit market” for up to two years to receive a score. Additionally, VantageScore models include consumers whose oldest trade is less than six months old.
The ability to better distinguish between consumers with a clear track record of unfavorable credit behaviors from those who simply lack credit histories is a significant advantage. Individuals in the latter group typically include:
Prior to their adoption of the VantageScore model, lenders have had difficulties assessing the creditworthiness of these normally unscoreable consumers. Automated scoring systems largely ignored this vast category of potential consumers despite the likelihood that many would prove to be low-risk consumers. The only previous alternative for lenders was to use costly manual underwriting processes.
With the VantageScore 3.0 model, a lender has a greatly enhanced ability to automatically underwrite these consumers with confidence.