VantageScore has introduced VantageScore 4plus, which is a new credit scoring model that integrates alternative data through Open Banking. This model allows lenders to access consumers' bank data via major aggregator APIs, combining this data with traditional credit information from Experian, Equifax, or TransUnion.

This approach aims to enhance underwriting decisions, particularly for consumers with limited credit histories who demonstrate good cash management. In essence, VantageScore 4plus uses consumer-permission bank account data to create a more predictive and comprehensive credit score. This scoring model is available as a pilot for banks, fintechs, and government lenders at the time of writing, and it maintains the same 300 to 850 scoring range as VantageScore 4.0, enabling most lenders to adopt it without changing their existing credit policies.

The model's use of real-time data allows lenders to quickly update a consumer's credit score, facilitating faster lending decisions. The inclusion of additional data in VantageScore 4plus aids lenders in making better decisions about new borrowers and monitoring existing ones. It can detect signs of financial distress months earlier than traditional credit bureaus, which can be useful in uncertain economic conditions.

VantageScore's new model is part of a broader trend in the industry, highlighted by Experian's recent introduction of Cashflow Attributes, another tool leveraging Open Banking and consumer permissioned data to provide lenders with more insights into underserved consumers. More information about VantageScore Founded in 2006 as a joint venture of Equifax, Experian, and TransUnion, VantageScore is based in Connecticut. According to the official press release, more than 3,400 institutions, including eight of the top 10 banks, use VantageScore for underwriting various credit products.

In a 2022 interview, VantageScore's Executive Vice President and Chief Product Officer discussed the company's credit scoring approach, emphasising its commitment to financial inclusion and innovation. In April 2023, VantageScore announced the release of its MarketGain product, aimed to offer data-driven insights on addressable markets to fintechs and lenders. At the time, the product demonstrated the benefits of using VantageScore 4.0.

in order to drive and improve financial inclusion development. It represented a customised analysis tool that offered lenders and investors the possibility to increase their addressable market. In summary, MarketGain was designed to provide lenders and fintech companies with detailed and customisable insights on how their specific addressable market will have the possibility to increase in the industry, alongside the implementation of the new VantageScore 4.0.

credit scoring model. .