New research from global management consulting firm Oliver Wyman finds a total of 12.3 billion scores were used across consumer credit loan categories; an increase of 20 percent over usage in the prior year
STAMFORD, Conn.–(BUSINESS WIRE)–VantageScore Solutions, LLC, developer of the VantageScore credit score model, announced today the results of a study conducted by global management consulting firm Oliver Wyman that examined how many VantageScore credit scores were used in a 12-month period between 2018 and 2019, as well as by which types of consumer lenders.
Overall, the study found that 12.3 billion VantageScore credit scores were used, a 20 percent increase in usage over the prior year. Since June of 2015, VantageScore usage has grown approximately 20% per year.
The Oliver Wyman analysts found that usage was widespread across credit loan categories, including credit card, auto finance, and personal loans as well as in functions where credit scores are often used, including pre-screen, marketing, origination, and underwriting and portfolio management.
Usage of VantageScore credit scores is widespread across all major consumer lending categories with the notable exception of the mortgage market, where FICO scores are currently required by both Fannie Mae and Freddie Mac during the initial screening of mortgage applicants when using their automated underwriting processes.
The Federal Home Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, has issued a new rule that might open the mortgage market up and would facilitate competition among credit score model developers in that arena.
“The continued surge in usage of VantageScore credit scores is a testament to an increasingly competitive marketplace for credit scores as well as the VantageScore model’s accuracy and inclusivity,” said Barrett Burns, president & CEO of VantageScore Solutions. “Consumer lenders are hungry for new and innovative approaches to consumer credit underwriting and clearly favor a competitive market that casts a wide net for scoring potential applicants in a safe and sound manner.”
Among Oliver Wyman’s other findings include:
- Credit card issuers and banks and thrifts accounted for over half of all usage of VantageScore credit scores.
- Over 3 billion VantageScore credit scores have been provided to consumers to empower them to practice good credit health habits, and nationwide most consumers use VantageScore credit scores as a proxy for how a lender might interpret their creditworthiness.
- Nine of the 10 largest banks and 29 of the 100 largest credit unions used VantageScore credit scores in one or more lines of business.
“Having compiled this report for the third year in a row, we see impressive gains in market usage of VantageScore credit scores,” said Peter Carroll, partner at Oliver Wyman. “Notably, we observed growth, in particular, amongst lenders using VantageScore for origination and other credit decisions, which demonstrates that lenders don’t appear to be as tethered to legacy processes as they once were.”
To download the full market adoption report, visit www.vantagescore.com/adoption.
About VantageScore Solutions
Credit scores can impact many aspects of your life, everything from whether you are able to get a loan and how much interest you will have to pay to whether you are able to rent an apartment. At VantageScore, we understand the impact of credit scores and we take that responsibility seriously.
VantageScore Solutions, LLC (www.VantageScore.com) is the independently managed company that owns the intellectual property rights to the VantageScore credit scoring models and is the leader in scoring innovation. The VantageScore 4.0 model scores approximately 40 million consumers who typically are not scored by conventional models – without sacrificing predictiveness.
VantageScore credit scores are used by lenders, landlords, utility companies, telecom companies, and many others to determine creditworthiness. A recent study found that approximately 12.3 billion VantageScore credit scores were used by over 2,500 unique users from July 2018 to June 2019. By using the VantageScore model, these enterprises have access to many more consumers, and in turn, consumers have greater access to mainstream credit.
While there are many credit scoring models in the industry, the “win-win” for VantageScore is its innovative, highly predictive, patent-protected, tri-bureau scoring methodology that provides lenders and consumers with more consistent credit scores across all three national credit reporting companies.