VantageScore Solutions Annual Validation Affirms Model’s Predictive Power

Tools

Outperforms in the Mortgage and Credit Card Industries by Wide Margins

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 2.0, the model’s second version, is an extremely effective risk management tool.

Specifically, VantageScore 2.0 demonstrated improved predictive power overall by a margin of five percent when compared with its performance at development in 2009. Moreover, in the mortgage and credit card categories, two industries facing a number of different challenges and growth impediments in the last few years, VantageScore 2.0 demonstrated improved effectiveness by a margin of as much as 16 and 14 percent, respectively, when compared with the model’s performance at development. Such dramatic improvement allows lenders to sharpen their strategies and rebuild portfolios intelligently and confidently knowing they are predicting the likelihood of defaults with greater accuracy regardless of a changing credit environment.

The annual validation also shows that VantageScore 2.0 outperformed benchmark credit score models developed by the three national credit reporting companies (CRCs) by margins of as much as 7 percent in the mortgage loan portfolio category, and 4 percent in the credit card portfolio category.

VantageScore 2.0 demonstrated continued consistency, as well, a hallmark differentiator of the VantageScore model. Through its unique, patented and patent pending technologies that allow the model to be used across all three CRCs, the VantageScore model is typically 30 – 40 percent more consistent than other credit scoring models developed by the three CRCs. A more consistent credit score model can decrease the risk exposure that a lender takes on, and result in greater precision in terms of products and pricing offered to the borrower.

“The results of this latest validation are a proverbial win-win. Lenders are empowered to make better, more accurate decisions, and consumers are afforded a truer measurement of their credit behavior,” said Barrett Burns, president and CEO of VantageScore Solutions. “This alignment equates to opportunities for consumers to obtain the right types of credit at the most appropriate terms. For industry participants in the mortgage and credit card markets, this will no doubt resonate as they seek new customer relationships and respond to their respective market challenges.”

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

The VantageScore credit scoring model is used by numerous lenders, making billions of decisions annually, including four of the top five financial institutions, the top five credit card issuers, two of the top five auto lenders, and one of the country’s largest mortgage lenders. Recent media reports disclosed that banking giant Chase adopted VantageScore in January of 2011. Secondary market participants including Fitch and S&P are also calibrated to rate securitized loan package issues when the underlying loans have been scored using the VantageScore model.

About VantageScore Solutions

Stamford, Conn.-based VantageScore Solutions, LLC (www.vantagescore.com) is an independently managed company that holds the intellectual property rights to VantageScore, a new generic scoring model introduced in March 2006. Created by America’s three major credit reporting companies (CRCs) — Equifax, Experian and TransUnion — VantageScore’s highly predictive model uses an innovative, patented and patent-pending scoring methodology to provide lenders and consumers with more consistent credit scores across all three major credit reporting companies and the ability to score more people.