New research shows the majority of U.S. consumers support newer methods of calculating credit scores and that most Americans also support competition among developers of credit scoring models.
The survey commissioned by VantageScore Solutions found that U.S. consumers want to see a shift in the credit scoring industry from an industry dominated by FICO to a marketplace characterized by competition and innovation. The survey revealed that across the board, consumers consider the fact that they have multiple credit scores positively.
The phone survey, of a representative sampling of more than 1,000 consumers, reveals that the majority of U.S. consumers support newer methods of calculating credit scores and that most Americans also support competition among developers of credit scoring models. Survey respondents expressed approval for multiple features of modern credit scoring models, including recognition of positive payment histories for rent, utility, and telecomm bills.
• A plurality of the National population (49%) and a slight majority of Millennials (51%) believe that rent payments should be factored into credit scores, rather than consigned to separate specialty scoring models (38% and 40% respectively).
• Across the board, consumers take a positive view toward having multiple credit scores, from different models. In fact, only four percent of U.S. consumers who have been scored by more than one credit scoring model viewed having multiple scores negatively, while over 55 percent characterized the trend as positive.
The survey also explored the extent to which consumers may be positively impacted by credit scoring models that exclude paid third-party collection accounts. Approximately five percent of Americans report having a paid off collection account (an estimated 12 million), which are excluded from consideration in VantageScore 3.0., VantageScore Solutions’ latest credit scoring model.
The VantageScore survey oversampled the Millennial population to help industry participants better understand and serve their credit needs. Among the findings included:
• 48% of Millennials said the reason they could not obtain credit is because of a lack of credit history as a young adult.
• Among those who at one point were unable to obtain a credit score, the inability to get a credit card was the most common impact.
• 42% of Millennials said that limited credit history caused them the inability to obtain the credit they need.
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