VantageScore Unveils Credit-Scoring Model That Includes Alternative Open Banking Data
VantageScoreĀ unveiled a new credit-scoring model that uses both traditional credit data and alternative open banking data.
The combination gives lenders a predictive lift of up to 10% compared to the VantageScore 4.0 credit score, whichĀ itselfĀ givesĀ an 8% lift over conventional scoring models, the company said in a Wednesday (May 15)Ā press release.
The new credit-scoring model is calledĀ VantageScore 4plusĀ and is now available for pilot by banks, FinTechs and government lenders, according to the release.
āBy harnessing the power of alternative open banking data, VantageScore 4plus is ushering in a new era of consumer credit scoring that is transformational for lenders,ā VantageScore President and CEOĀ Silvio TavaresĀ said in the release.
With the increased predictive power of VantageScore 4plus, lenders can reduce the risk of opening new lines of credit with customers who would not haveĀ been approvedĀ for credit previously, such as those who are not current account holders, are recent immigrants, or have not used credit products but have demonstrated positive cash management behaviors, according to the release.
VantageScore 4plus also sees trends in consumer distress months before the credit file, provides a credit score adjustment within seconds and adds an extra layer of protection against fraudulent loans, the release said.
The solution will be deliveredĀ through the three national credit reporting agencies andĀ willĀ supportĀ Fair Credit Reporting Act-compliant lending decisioning, per the release.
VantageScore is an independently managed joint venture companyĀ of the three national credit reporting agencies,Ā Equifax,Ā ExperianĀ andĀ TransUnion,Ā according to the release.
The firmās new solution arrivesĀ at a timeĀ whenĀ delinquenciesĀ are climbing across all tiers of credit ā and for a range of credit products,Ā including mortgages, credit cards, personal loans and auto loans.
While the average American consumer remains ācredit healthy,ā some trouble spots are apparent, VantageScore reported in the February edition of its Credit Gauge.
