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® credit score 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 the VantageScore® credit score is a scalable solution to expanding mortgage credit without relaxing credit standards should the FHFA and GSEs accept VantageScore® credit scores.
