"These results show that open banking data, when used responsibly and in combination with credit file data, can dramatically improve both risk management and financial inclusion," said Dr. Andrada Pacheco, Executive Vice President and Chief Data Scientist at VantageScore. "What excites us most is the real-world impact—helping lenders say yes more often to credit-worthy consumers."
VantageScore 4plus™, launched in 2024, builds on the industry-leading performance of the VantageScore models by adding bank transaction data to deliver a real-time, FCRA-compliant credit score. It offers enhanced risk separation among populations with limited credit histories, according to analyses performed by VantageScore. Because it is compatible with all three major credit bureaus and aggregator APIs, lenders can easily adopt it without overhauling credit policies.
Michigan State University Federal Credit Union saw strong results in VantageScore 4plus™ testing, including:
- 33% of subprime moved to higher credit tiers
- 41% of near prime members moved to higher credit tiers
"Our mission is to support members through every stage of their financial journey," said Blake Johnson, Vice President of Lending at MSUFCU. "With so many of our members being recent graduates and consumers that are new to credit, the results of our backtest show that with cash flow insights driven by VantageScore 4plus™ we can reduce losses and extend credit with more confidence to these hard-to-underwrite members."
In testing its portfolio, Patelco Credit Union found that VantageScore 4plus™ delivered:
- 12% of subprime and 15% of near prime members moved to higher credit tiers
- 4.8% improvement in predictive power over VantageScore 3.0 in originations
Both credit unions also emphasized the model's stability.
"At a time when many consumers are facing higher interest rates and financial pressure, VantageScore 4plus™ has the potential to provide a more complete view of member financial behavior," said Yazel Pardo, Head of Credit Risk at Patelco Credit Union. "Based on the results, there is a clear actionable opportunity to expand access to credit with greater confidence, especially among new-to-credit and underserved members, without increasing risk."
To learn more about VantageScore 4plus™ or to begin a pilot, lenders can visit https://vs4plus.vantagescore.com.
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 and digital tools to provide consumer credit products or 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 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 and owners include the three Nationwide Consumer Reporting Agencies (NCRAs) – Equifax, Experian, and TransUnion.
SOURCE VantageScore
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