Credit Scores - Most Predictive Credit Scoring Model Launched
Newest version of score enables lenders to improve risk prediction in changing market
Experian®, the global information services company, today announced the availability of VantageScore® 2.0 from Experian, the newest and most predictive version of the credit scoring model.
Built on the proven performance of VantageScore 1.0, VantageScore 2.0 was developed due to the extraordinary changes in economic and credit conditions and the ways consumer payment behaviors have markedly changed over the past several years. Testing has shown that the new model improves risk prediction, and scores more people and provides more consistent consumer scores across all three credit reporting companies over VantageScore 1.0.
Experian advances new model and first lender adopts
According to JP Morgan’s Global Equity Research, October 2010, “VantageScore is gaining traction. Chase recently adopted VantageScore becoming one of the first major lenders to replace certain usage of FICO scores with the new model and view it as an important sign of the bureaus’ growing prowess in analytics, modeling and decisioning.”
VantageScore 2.0 from Experian enables lenders in production environments to increase their populations of target customers while managing appropriate risk. This is done through the new credit model’s development sample, which is compiled from two performance time frames: 2006–2008 and 2007–2009. Each time frame contributes 50 percent of the sample, reflecting more recent credit conditions. This approach reduces the model’s sensitivity to volatile behavior in a single time frame and helps create a highly predictive score that enables lenders to mitigate risks and make more informed lending decisions.
“Given the dramatic shifts in today’s credit environment, lenders need information and tools that reflect these changes to make sound lending decisions,” said Kerry Williams, group president of Experian Credit Services and Decision Analytics. “VantageScore 2.0 delivers an even greater performance lift to provide a higher level of confidence in risk decisions when including the score in the underwriting and lending process.”
New features
VantageScore 2.0 includes authorized user trades when calculating the score and employs an optional set of reason code explanations that are more customer-friendly. Also packaged with VantageScore 2.0 are the same innovative performance definitions, level characteristics and advanced segmentation techniques included in VantageScore 1.0 which all contribute to the model’s strength.
Lenders can begin using VantageScore 2.0 immediately. For more information, call 1 888 414 1120 . Consumers can find educational information about credit and order their VantageScore at www.experian.com/getyourvantagescore .
About Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score and protect against identity theft.
For more information, visit http://www.experian.com.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2010, was $3.9 billion.
Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and Sao Paulo, Brazil.
CONTACT: Susan Henson of Experian Public Relations, +1-714-830-5129 , [email protected]
Web Site: http://www.experian.com
