Benefits of credit scoring options

December 8, 2016 by Guest Contributor

Looking to score more consumers, but worried about increased risk?

A recent VantageScore LLC study found that consumers rendered “unscoreable” by commonly used credit scoring models are nearly identical in their financial and credit behavior to scoreable consumers. To get a more detailed financial portrait of the “expanded” population, credit files were supplemented with demographic and economic data.

The study found:

  • Consumers who scored above 620 using the VantageScore 3.0 model exhibited profiles of sufficient quality to justify mortgage loans on par with those of conventionally scoreable consumers.
  • 3 to 2.5 million – a majority of the 3.4 million consumers categorized as potentially eligible for mortgages – demonstrated sufficient income to support a mortgage in their geographic areas.

The findings demonstrate that VantageScore is a scalable solution to expanding mortgage credit without relaxing credit standards should the FHFA and GSEs accept VantageScore 3.0.

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