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Trended Credit Data Attributes in VantageSore 4.0

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1 - VantageScore: Trended Credit Data Attributes in VantageScore 4.0 Trended Credit Data Attributes in VantageScore 4.0 VantageScore Solutions introduces trended credit data with the release of its VantageScore 4.0 credit score model. In this document, you will find exactly what these new time-series attributes are composed of, what performance benefits users should expect as a result, and examples of the underlying consumer credit behaviors that were used to construct these attributes. WHAT IS TRENDED CREDIT DATA? Trended credit data contributes to a credit score by helping to assess the trajectory of credit behaviors, measuring the magnitude and direction of a consumer's credit health in the last three to 24 months of time. These new attributes will supplement the static, one point-in-time information historically gathered in credit files, offering a more complete view of a consumer's credit behavior. Trended credit data builds from the data fields that are already included in consumers' monthly credit files, and synthesizes the existing information to measure rates of change and aggregated insights. By revealing patterns in credit behaviors over time, such as the number of balance decreases or the increase in a borrower's utilization, these attributes are especially useful at improving the performance of the model for Prime and Superprime consumers, for both new originations and existing accounts (Figure 1). Scorecards were designed and built for each credit tier. Each scorecard was built both with and without these trended data attributes and the predictive performance of each scorecard was then calculated using a Gini statistic. The incremental performance lift from the use of trended attributes is provided in Figure 1. SUMMARY • Trended credit data are attributes that summarize a consumer's credit behavior over the past 24 months to help assess the trajectory of his/her credit health. Trended credit data augments a consumer's traditional static credit information in VantageScore 4.0, providing additional performance gains to the credit risk score. • Most of the gains to predictive performance in VantageScore 4.0 arising from trended credit data occur within the Prime and Superprime credit tiers. • VantageScore conducted rigorous testing of these new attributes to ascertain their consistency, availability, and amount of performance improvement to the VantageScore 4.0 model. • Trended credit data attributes are constructed from the same data points traditionally used by the credit reporting companies, including: loan amount, credit limit, balance, minimum payment due, and scheduled payments. Figure 1: Percent Incremental GINI Lift Using Trended Credit Data Attributes 4.7% 6.2% 10.7% 13.8% 0.8% 4.2% 19.5% 9.0% Subprime Near Prime Prime Super Prime Existing Account Originations

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