VantageScore's RiskRatio™ Adds New Indicators to Help Lenders More Quickly Detect Credit Risk Trends

• New Delinquency Categories Offer Lenders Deeper Insights into Consumer Credit Patterns
  
  
• Enhanced Portfolio Segmentation Helps Refine Risk Management Strategy by Product
  
  
• Six- and Twelve-Month Performance Windows Enable Lenders to Spot New Trends

SAN FRANCISCO, Dec. 16, 2024 /PRNewswire/ -- VantageScore, a leading national credit-scoring company, today announced significant enhancements to its predictive digital tool, RiskRatio Powered by VantageScore®. Designed to help lenders, financial institutions and other users of credit scoring models understand and assess the default risk across different VantageScore credit score ranges, the latest updates give RiskRatio even more predictive power.

"Eight of the top ten U.S. lending institutions use VantageScore's innovative digital tools to make faster, more informed decisions," said Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore. "With RiskRatio's new features, lenders can gain unparalleled insight into consumer credit trends, enabling them to act swiftly and strategically in response." 

Key enhancements to RiskRatio™ include:

GRANULAR DELINQUENCY INSIGHTS: Expanded delinquency categories—30+ Days Past Due (DPD), 60+ DPD, 120+ DPD, ChargeOff + Bankruptcy, and Bankruptcy—offer more precise identification of credit risk trends. Identifying these delinquency trends sooner allows lenders to provide targeted interventions to borrowers earlier.

ENHANCED RISK SEGMENTATION BY PRODUCT: The addition of Mortgage product segmentation—covering First Mortgages, HELOCs (home equity lines of credit), and HELOANs (home equity loans)—provides deeper insights into borrower behavior across product types. The additional segmentation capacity helps lenders make timely adjustments to lending policies in response to shifts in the marketplace.

SHORTER PERFORMANCE WINDOWS FOR EMERGING TRENDS:  In addition to the existing 24-month performance window, RiskRatio™ now also includes 6-month and 12-month performance windows. These additional options help lenders detect shifts in delinquency rates more quickly, providing insight into the potential impact of changes to lending policies or economic events.

RiskRatio™ is part of VantageScore's suite of free access digital tools for lenders. These include CreditGauge™, a monthly analysis of U.S. consumer credit health; Inclusion360®, which uncovers underserved consumers by geographic market; and MarketGain™, which looks at the increased addressable market lenders can access after implementing the VantageScore 4.0 credit scoring model.

To explore insights from RiskRatio Powered by VantageScore®, please visit https://www.vantagescore.com/lenders/risk-ratio/.

About VantageScore®
VantageScore is the fastest-growing credit scoring company in the U.S., and is known for the industry's most innovative, predictive, and inclusive credit score models. In 2023, usage of VantageScore increased by 42% to more than 27 billion credit scores. More than 3,400 institutions, including 8 of the top 10 banks, use VantageScore credit scores to provide consumer credit products including credit cards, auto loans, personal loans and mortgages. The VantageScore 4.0 credit scoring model scores 33 million more people than traditional models. With the FHFA mandating the use of VantageScore 4.0 for Fannie Mae and Freddie Mac guaranteed mortgages, the company is also ushering in a new era for mortgage lending and helping to close the homeownership gap.

VantageScore is an independently managed joint venture company of the three Nationwide Consumer Reporting Agencies (NCRAs) – Equifax, Experian, and TransUnion. 

SOURCE VantageScore