VantageScore 3.0 is a highly advanced credit scoring solution that offers benefits to consumers and professionals alike. Developed directly by the three major credit bureaus – Equifax, Experian, and TransUnion – VantageScore has the ability to rate more than 30 million consumers not typically scored by conventional methods.

How can knowing an applicant’s credit score improve your company’s decision-making process?

Credit Scores and What They Tell You

Credit scores play an important role in minimizing risk. They contribute to fraud prevention and reveal financial management patterns. Background screening companies like Inforex leverage VantageScore to provide your company with as much credit-related information as possible. Because whether you’re evaluating a business or vetting a tenant, the more detailed the data, the better.

When you run a background check on employees, renters, or other business-related prospects, that check typically includes a credit report. The report contains a range of financial data, public records, and government-sourced information. And when all of those figures are crunched together, a credit score is produced.

The credit scores assigned by VantageScore 3.0 extend from 300 (deficient) to 850 (excellent). Those numbers can give you valuable insight into an applicant’s financial behaviors and reliability, including:

  • How regularly their bills are paid on time,
  • How likely they are to default on a loan, and
  • How they compare with other consumers and candidates

Because credit scores derive from information that changes frequently, it’s important to approach every new financial evaluation with a current credit report.

The Hidden Consumer Revealed

Like other systems, VantageScore uses a mathematical formula to assign its credit scores. But it combines cutting-edge, patented analytics with advanced credit risk modeling. VantageScore 3.0 also addresses a major problem in the credit arena that traditional models do not.

Millions of creditworthy Americans struggle through life without the aid of a credit score. Without a credit rating, feats like getting a loan or renting an apartment become challenging, if not outright impossible. The lack of a credit score also leaves a glaring hole where background checks are concerned.

Consumers who make up this “credit invisible” group generally fall into one of three categories:

  • Those who move to the US without a credit history (about 16%),
  • Those who tend to avoid credit in favor of cash (about 22%), and
  • Those who are too young to have established a history of their own (about 41%)

Given the size of the millennial generation coming into their prime spending years, this last statistic is key. Not only did these young adults recently become the largest employed demographic, 65% of American households headed by millennials are rentals.

VantageScore’s sophisticated programming has made it possible for as many as 35 million formerly anonymous consumers to be granted a credit score! Meanwhile, the model continues to typically outperform other credit scoring systems across all industry types and segments.

VantageScore Solutions recently announced that it will soon be launching VantageScore 4.0. This newest version promises to deliver even more ground-breaking industry firsts to lenders and consumers alike. And that’s great news when it comes to playing a more predictive, more accurate, and more inclusive role in the credit checks your company needs.

Share This