Business & Education Services: VantageScore MS Financials Conference Takeaways

Research evidence excerpt

Business & Education Services: VantageScore MS Financials Conference Takeaways

IdeaMmarkets. VantageScore says its mortgage usage has grown more than 100% in each

of the last two years. The number of mortgage lenders using VantageScore has

increased from 21 in April to more than 30 today, showing acceleration adoption

after regulatory barriers were removed. Secondary market acceptance is also

becoming an important growth driver: ABS usage of VantageScore increased 68%,

and the company expects MBS adoption to increase next year. VantageScore sees

this as the next flywheel, with broader lender usage supporting securitization

acceptance and secondary market adoption reinforcing further lender penetration.

Responsible embracing of AI. VantageScore believes it is proactively embracing AI

across the organization, but doing so in a responsible, explainable way. The

VantageScore has to be explainable; this is true for consumers, lenders, and

regulators, all of whom demand it. The first question consumers ask when they are

denied a loan is "why?" VantageScore develops its models to be grounded in an

explainable format.

Gaming the system viewed as a myth. VantageScore argued that lenders are not

getting two scores and using the more favorable one; instead they argue that the

lenders are switching the workflow more broadly because they view it as a better/

more holistic score. VantageScore said that its model captures more consumers,

better identifies risk and is 13% more predictive than their competitor while also

scoring a larger share of loans. VantageScore thinks that score choice is now a part

of the market and that it being supported by regulators and competition is

ultimately healthy because it is not only better for the consumers but also gives