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Wednesday, March 15, 2006

TransUnion Unveils New Credit Scoring System: VantageScore

Here's today's big news: TransUnion, one of the nation's big 3 credit reporting agencies, has recently come out with a new credit reporting system called VantageScore. As if there isn't enough confusion with all the different credit scores already, right? Well, VantageScore aims to bring clarity to the world of credit reporting.

VantageScore credit scores range from 501 to 990, with scoring groups that mimic the intuitive scale that we all know from school: A through F. According to the folks at TransUnion, VantageScore will bring consistency to credit scoring, thanks in part to the system's ability to analyze data from all 3 credit reporting agencies at the same time. TransUnion also claims that VantageScore is better at predicting short-term delinquencies better than any other commercially available credit rating system.

More details can be found below in the snippet from yesterday's press release:

"New Score to Fill Void of Consistency and Choice in the Industry

TransUnion today released an industry first in the area of scoring models - VantageScoreSM. The new score is the first of its kind to leverage a consistent scoring methodology across all three national credit reporting companies. VantageScore brings clarity to businesses and consumers through an easily interpreted numeric score, and choice to the marketplace with a new, highly predictive scoring option.

Extensive testing throughout the VantageScore development process has shown that it outperforms and is more predictive than other commercially available models in the marketplace today in projecting short-term delinquencies. With its introduction, TransUnion has established a dedicated implementation team to work with customers to analyze and test VantageScore with their portfolios and to assist them in activating it with their internal processing systems.

'As markets have matured, so have customers' needs,' said TransUnion's Chet Wiermanski, one of the creators of VantageScore and vice president of Analytics for the company. 'VantageScore represents TransUnion's on-going commitment to proactively address the needs of our customers by developing highly predictive risk models.'

The score is unprecedented in that it looks at and analyzes data at the same point in time on the same consumer records from all three national credit reporting companies. VantageScore was developed using a national sample of anonymous credit information of approximately 15 million consumers and uses a score range of 990-501 and score groupings that approximate the familiar academic scale:

  • 901-990 A
  • 801-900 B
  • 701-800 C
  • 601-700 D
  • 501-600 F

'By developing a patent-pending approach to consistently interpret the credit information stored within each credit repository, also referred to as characteristic leveling, any credit scoring differences between the credit reporting companies can be attributed to data differences in a consumer's credit file rather than data interpretation - as is the case in most scoring models today,' said Wiermanski. 'With VantageScore, a significant achievement is accomplished by creating this consistent scaling across the credit reporting companies; an approach we believe is long overdue and will be universally embraced.'

One of the leading experts in the industry in the areas of scoring and analytics, Mr. Wiermanski was responsible for implementing TransUnion's first scoring systems for a variety of industries. He has done extensive work in the areas of predictive modeling and the use of event-based triggers and is the author of numerous white papers and studies on the subject. He also is an active member of Georgetown University's Credit Research Center.

To learn more about VantageScore or to schedule an interview with Chet Wiermanski, please contact Clifton M. O'Neal at 847-722-4843, Jason Nierman at 312-985-3059 or Jeff Bodzewski at 312-729-4270.

About TransUnion

TransUnion is a leading global information solutions company that customers trust as a business intelligence partner and commerce facilitator. TransUnion offers a broad range of financial services that enable customers to manage risk and capitalize on market opportunities. The company uses advanced technology coupled with extensive analytical capabilities to combat fraud and facilitate credit transactions between businesses and consumers across multiple markets. Founded in 1968, Chicago-based TransUnion employs 4,100 associates that support clients in more than 30 countries. Visit us at"

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