The article outlines the advantages of VantageScore over other credit scoring models, as well as how VantageScore is able to identify and score more creditworthy individuals.
“The VantageScore system was designed to provide a consistent credit scoring model that could be used by all three credit bureaus. It also aimed to expand the number of people who receive credit scores, like college students, recent immigrants, and others who might not have used credit or use it sparingly,” says Jeff Richardson, SVP of Marketing and Communications for VantageScore.
The article also explains why VantageScore is more predictive than other models.
“VantageScore 4.0 relies on trended credit data that covers more than a month of consumer activity. For example, if a consumer has high credit card balances around the holidays and pays them off every year, it’s important to not let the credit score be unduly influenced by that one month’s activity,” Richardson says.
“Instead, the score looks at a longer time frame to see how the behavior is distinctive from someone who has high credit card balances all year. Also, if consumers pay double the amount owed on their monthly auto loan payment, for example, they can be rewarded for that behavior.
This data allows VantageScore to be more predictive, allowing people new to credit to have an opportunity to get a higher score than they would have otherwise, Richardson says.
The 4.0 version also uses machine-learning technology to better predict the behavior of people with limited credit history and removes potentially negative items from consideration in a consumer’s credit score, such as civil judgments and some medical collection information.”
Read more here: https://money.usnews.com/credit-cards/articles/what-is-a-vantagescore-used-for.
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