VantageScore Solutions’ Consumer Survey Reveals Nationwide Support for New Approaches to Credit Scoring

November 6, 2015         By: Mike Dautner

A survey commissioned by VantageScore Solutions found that U.S. consumers want to see a shift in the credit scoring industry from an industry dominated by one developer to a marketplace characterized by competition and innovation.

The survey revealed that across the board, consumers consider the fact that they have multiple credit scores positively.

The phone survey, of a representative sampling of more than 1,000 consumers, reveals that the majority of U.S. consumers support newer methods of calculating credit scores and that most Americans also support competition among developers of credit scoring models. Survey respondents expressed approval for multiple features of modern credit scoring models, including recognition of positive payment histories for rent, utility, and telecomm bills.

 

  • A plurality of the National population (49%) and a slight majority of Millennials (51%) believe that rent payments should be factored into credit scores, rather than consigned to separate specialty scoring models (38% and 40% respectively).

 

  • Across the board, consumers take a positive view toward having multiple credit scores, from different models. In fact, only four percent of U.S. consumers who have been scored by more than one credit scoring model viewed having multiple scores negatively, while over 55 percent characterized the trend as positive.

The survey also explored the extent to which consumers may be positively impacted by credit scoring models that exclude paid third-party collection accounts. Approximately five percent of Americans report having a paid off collection account (an estimated 12 million), which are excluded from consideration in VantageScore 3.0., VantageScore Solutions’ latest credit scoring model.

“The results of this survey clearly demonstrate that consumers prefer competition in the credit scoring marketplace, and that they welcome important innovations VantageScore has delivered to a market that previously lacked the motivation to better serve lenders and consumers,” said Barrett Burns, president and CEO of VantageScore Solutions. “Our model provides a highly accurate credit score along with important benefits for consumers and lenders, which ultimately helps to match consumers to the right types of credit products and credit granters.”

MILLENNIALS CITE BEING UNSCOREABLE AS OBSTACLE TO CREDIT ACCESS

The VantageScore survey oversampled the Millennial population to help industry participants better understand and serve their credit needs. Among the findings included:

  • 48% of Millennials said the reason they could not obtain credit is because of a lack of credit history as a young adult.
  • Among those who at one point were unable to obtain a credit score, the inability to get a credit card was the most common impact.
  • 42% of Millennials said that limited credit history caused them the inability to obtain the credit they need.

“Lenders and policy makers need to take notice that massive populations of Millennials fail to meet the minimum criteria associated with conventional credit scoring models, whereas many would be scoreable when updated models, such as the VantageScore 3.0 model, are employed,” added Burns. “These consumers are reachable, scoreable and can be made eligible for automated underwriting systems in a safe and sound manner. They are seeking credit products and credit cards in particular. Many are very attractive potential borrowers, and lenders using outdated credit scoring models are missing opportunities to win their business and their loyalty.”

Survey results are available via an infographic that is posted on VantageScore Solutions’ website.

SURVEY METHODOLOGY

The survey was conducted by FTI Consulting and commissioned by VantageScore Solutions. Survey questions were delivered via telephone. The audiences included a national sample of 1,000 U.S. adults over the age of 18 and an additional oversample of Millennials (ages 18 – 34). The survey was fielded between July 28 and August 16, 2015.