New Credit Scoring Model Implemented By Equifax, Experian and TransUnion

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STAMFORD, Conn., Jan. 20, 2011 – VantageScore Solutions announced today that the latest version of its credit scoring model, VantageScore® 2.0, is now available to financial institutions in a production environment from each of the three credit reporting companies (CRCs) ‐ Equifax, Experian and TransUnion.

VantageScore 2.0 was launched in October 2010 and has been available for testing since that time. This new version is now fully implemented at each CRC, according to VantageScore Solutions officials.

One of the driving forces behind the creation of VantageScore 2.0 was a significant change in consumer credit repayment behavior, according to Sarah Davies, senior vice president of product management, analytics and re. Davies said all credit models should be updated regularly to ensure they remain as accurate and predictive as possible, adding that VantageScore 2.0 shows an improved performance over the original version across the main industries where credit scores are used.

“VantageScore 2.0 is built on a blend of consumer credit behaviors from 2006‐2009, which creates a highly predictive score,” said Barrett Burns, VantageScore Solutions President and Chief Executive Officer. “We’ve recently experienced a variety of economic scenarios, which have impacted consumer behavior of the past several years. This includes an increase in foreclosures in the housing market and changing payment priorities among consumers.”

The newest installment of VantageScore was built using a development sample compiled from two performance timeframes, 2006 – 2008 and 2007 – 2009, with each timeframe contributing 50 percent of the sample, reflecting more recent credit conditions.

Payment History

Repayment behavior (satisfactory, delinquency, derogatory)

Utilization

Percentage of credit amount used/owed on accounts

Balances

Amount of recently reported balances (current and delinquent)

Depth of Credit

Length of credit history and types

of credit

Recent Credit

Number of recently opened credit accounts and credit inquiries

Available Credit

Amount of credit available

By using a development sample from this extended window, VantageScore 2.0 captures both a broad and recent set of consumer behaviors across the full spectrum of economic events, reducing algorithm sensitivity to highly volatile behavior that can be found in a single timeframe and extending performance stability over time.

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Source: Vantage Score press release dated Jan. 10, 2011

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