Tag Archives: Telecommunications

Risk & Compliance Truth Squad: Does VantageScore Use Alternative Data?

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Jan162017

In the era of Big Data, so-called alternative data holds a special promise — to shine a new light on consumer behavior. When it comes to credit scoring, alternative data means data not being used today for risk assessment, and specifically data not found in the credit bureaus. Lenders hope scoring this data could allow them to make faster, better decisions on people who don’t have FICO® Scores — the “unscorables” with sparse or no credit bureau data on file. Hoping to jump on the alt-data bandwagon, the three main US credit reporting agencies – through their VantageScore business – have been claiming that their score uses alternative data to score more consumers than the industry-leading FICO® Score. It sounds good, but is it true? Claim: VantageScore leverages alternative data to score millions more consumers than FICO Scores. Truth: The “alternative” data VantageScore uses is utilities and cell phone bills... [Read More]

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