"The side-by-side analysis of a robust 10-year historical mortgage data set, using no manipulated inference, assumptions, or triangulations, provides conclusive evidence that VantageScore 4.0 is a more predictive credit scoring model for assessing risk in conforming mortgages, compared to the incumbent Classic FICO score," said Dr. Andrada Pacheco, Chief Data Scientist at VantageScore. "Numerous independent assessments agree with our findings."
Key findings of the study include:
- 11.2% More Predictive Lift: According to the analysis, VantageScore 4.0 captures 11.2% more mortgage defaults within the highest risk scored population in the historical 10-year data set, compared to the Classic FICO Score.
- 3.5% Performance Improvement: VantageScore 4.0 outperforms the Classic FICO score by a relative 3.5% in predicting 90 or more Days Past Due (DPD) delinquencies within two years.
- Independent and Third-Party Analyses Agree, VantageScore 4.0 Is Better: Independently, studies conducted on the same historical mortgage data set by the nation's largest banks corroborate findings that VantageScore 4.0 is an overall better indicator for capturing loan delinquencies1. Additional mortgage entities that already accept VantageScore 4.0 for mortgage include the Veterans Administration, the Federal Home Loans Bank of San Francisco, the Federal Home Loan Bank of New York, the Federal Home Loan Bank of Chicago, and the Federal Home Loan Bank of Dallas.
- 33 Million More Get a VantageScore 4.0, 13 Million Receive a VantageScore Above 620 and Five Million are Mortgage Qualified: Additionally, by including rental, utilities, and telecom data from the credit files in the VantageScore 4.0 calculations, as well as by using explainable machine learning techniques on borrowers with limited and sparse credit files, VantageScore 4.0 unlocks an estimated five million creditworthy borrowers for the mortgage market.
For more information on VantageScore 4.0 implementation, please visit VantageScore's Mortgage landing page.
About VantageScore®
VantageScore is the fastest-growing credit scoring company in the U.S., and is known for the industry's most innovative, predictive and inclusive credit score models. In 2024, usage of VantageScore increased by 55% to hit 42 billion credit scores. More than 3,700 institutions, including the top 10 U.S. banks, use VantageScore credit scores or digital tools to provide consumer credit products and generate greater insights into consumer behavior. The VantageScore 4.0 credit scoring model scores 33 million more people than traditional models. With the FHFA mandating the use of VantageScore 4.0 for Fannie Mae and Freddie Mac for guaranteed mortgages, the company is also ushering in a new era for mortgage lending and helping to close the homeownership gap.
VantageScore is an independently managed joint venture company of the three Nationwide Consumer Reporting Agencies (NCRAs) – Equifax, Experian, and TransUnion.
1 "The Score" Podcast, September 11, 2024. Link: https://www.youtube.com/watch?v=iPgilo13Gz8
SOURCE VantageScore
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