The Score

According to the World Economic Forum, 85% of financial services organizations are using AI in some capacity. It’s no secret the artificial intelligence ‘arms race’ is impacting virtually every industry, especially financial services. It’s also creating interesting and novel challenges for every industry, both in its application and its usage.   It’s often said that technology advances faster than regulation. Is that the case with artificial intelligence, or are the rules of the road keeping pace with innovation? And how should fintech companies approach AI governance to ensure fair outcomes? Tamra Moore is VantageScore’s Deputy General Counsel. Tamra has over 15 years of experience as a thought leader on legal issues associated with the use of AI and machine learning. She joins The SCORE this week to discuss the importance of centering the consumer experience in AI usage.   Listen to the episode here. 

To date, nearly all mortgage loans continue to use outdated credit scoring models, though in other loan categories, much newer, more predictive, and inclusive models are most commonly used.  But the mortgage industry is advancing. By next year, all mortgage loans backed by Fannie Mae and Freddie Mac will require a VantageScore 4.0 credit score. In advance of this change, Bank of America recently issued an independent research report analyzing the VantageScore 4.0 mortgage data set.   Pratik Gupta is the Head of CLO & RMBS Research at Bank of America Securities. Pratik joins The SCORE this week to discuss the findings of Bank of America’s recent research into VantageScore 4.0. Pratik outlines his findings and reasons his team of analysts concluded it’s “better” for mortgage than the incumbent score.  Listen in to learn more.

It's been called the “$1 trillion opportunity.”  Currently, the housing market is paralyzed. Homeowners are left out of the market due to a lack of inventory or—even worse—can’t access it due to outdated credit scoring models that exclude them. Recent VantageScore research found an estimated $1 trillion of pent-up growth potential in the form of borrowers who have historically been left out of homeownership opportunities due to unfairly restrictive, decades-old scoring models. But that's all changing with the implementation of VantageScore 4.0 for mortgages funded by Fannie Mae and Freddie Mac. Anthony Hutchinson is Senior Vice President of Industry and Government Relations at VantageScore. Tony joins The SCORE this week to help lenders understand the importance of implementation and plan their migration to VantageScore 4.0. To learn more about VantageScore 4.0 for mortgage, visit https://www.vantagescore.com/lenders/industries/mortgage/.

It is estimated that consumers are 1.5 times more likely to report feeling their credit union cares about their financial well-being than for-profit financial institutions.  Credit unions, or not-for-profit financial cooperatives, have unique structural differences that allow them to pass profits onto their member-depositors in the form of lower loan interest rates, higher yields on savings, and fewer or lower fees. With historically high interest rates deeply impacting household budgets and consumers’ wallets, credit unions represent a small but impactful part of the financial ecosystem in the United States.  Carrie Hunt is the Chief Advocacy Officer of America’s Credit Unions, the new national trade association being formed through the merger of the Credit Union National Association (Credit Union National Association) and the National Association of Federally-Insured Credit Unions (NAFCU).  Carrie joins The SCORE to discuss how credit unions help make the financial services system more efficient, effective, and accessible to consumers.  Listen in to learn more. 

CreditGauge, VantageScore’s monthly analysis of consumer credit health, found that in April 2024, delinquencies declined for a second straight month. To date, consumers are weathering economic pressures fairly well. But is this proof of a climb out of a delinquency-heavy phase, or are household budgets on a bumpy roller coaster ride longer-term? Atif Mirza is Vice President of Digital at VantageScore, where he manages the VantageScore suite of digital tools for lenders – CreditGauge, Inclusion360, and RiskRatio – tools that help lenders expand their footprint in ways that both serve more creditworthy consumers and also boost financial inclusion. Atif joins The SCORE to help demystify the current state of consumer credit health for lenders and provide a sense of how average Americans are managing their household balance sheets.  Listen in to learn more. Read the latest VantageScore CreditGauge insights: https://www.vantagescore.com/lenders/credit-gauge/

Through exploitative interest rates of up to 600%, predatory lenders extract an estimated $9 billion from consumers each year – often from low-income communities of color and other populations unable to access the credit they need.   We know what financial inclusion is, and why it’s important. But what creates ‘financial exclusion’ to begin with, and how can we work to eradicate it?  Dr. David Henderson, Founder and CEO of Giving Credit, joins The SCORE this week. Giving Credit is a fintech that recognizes and capitalizes community finance by mapping social credit networks and revealing how much you can borrow from friends and family. Listen in as Dr. Henderson explores the root causes of financial exclusion and the ways in which alternative data uses such as reciprocated transactions and cash flow underwriting broaden financial inclusion and bring more creditworthy participants into the financial services marketplace. 

Whether you’re a renter or a homeowner, you likely have already had to contend with some of the challenges of the current housing market. While buyers and current homeowners faced persistently high mortgage rates and low housing supply in recent years, renters also faced steep cost increases in many markets. Will 2024 be more of the same? Selma Hepp is the Chief Economist for CoreLogic, America’s largest provider of advanced property and ownership information, analytics and data-enabled services. Selma joins The SCORE this week to provide her perspectives on the residential housing market, trends we can anticipate in 2024, and what prospective homeowners can expect in the future as they get closer to achieving the American dream. Listen to Selma’s insights here.

Originations across many product types – mortgage, credit cards, and the like -- were all lower in 2023 than the year prior. Historically high interest rates pinched consumers and made it less appealing to open new lines of credit.  Will 2024 be more of the same? What can consumers and lenders alike expect in the coming year? Is the economy’s elusive ‘soft landing’ anywhere in sight? Kelsey Zhu, Lead Analyst at Bernstein/Autonomous, joins The SCORE this week. Kelsey to talk us through where we are in the consumer credit cycle and why she’s optimistic about what both consumers and lenders have to look forward to in 2024.  Listen to Kelsey’s insights here.

Spending is up! Delinquencies are up? And oh, it's an election year!   With the resumption of student loan payments, persistent inflation, and other potential challenges, what can consumers expect in 2024? To be sure, all eyes will be on the economic health of consumers.  This week, Susan Fahy joins THE SCORE Podcast to discuss what CreditGauge reveals about Americans’ current credit health. Susan is VantageScore’s EVP and Chief Digital Officer. In addition to spearheading the monthly CreditGauge analysis, Susan also helps keep lenders informed through leading-edge digital tools such as Inclusion360, RiskRatio, and MarketGain.   Listen to Susan’s insights here. 

Recent news headlines indicate that consumers shopped big this past holiday season, and retail numbers, on the surface, appeared to be up. But given notable economic pressures like record-high inflation, how much of that was just paying ‘more’ for ‘less’? And how can consumers make sure they’re getting the best possible deal when using credit?   This week’s guest on The SCORE is Matt Schultz, Chief Credit Analyst at Lending Tree, America’s largest marketplace for loans. Matt joins The SCORE to explain common mistakes consumers make when rate shopping as well as reasons why he thinks “people have more power over their money than they realize.” He also explores how the rise of buy-now-pay-later (BNPL) services will continue to transform consumer finance, why credit usage reflects consumer sentiment, and how credit card lenders will continue to compete in the new lending marketplace.  Listen to the episode here.  

In 2023, consumers balanced various financial challenges: the lingering effects of record inflation, rising credit card balances, and student loan payment resumption, among others, leaving many to explore financial products that help make changing personal budgets more manageable. In the same year, credit unions stepped in to fill gaps created by larger financial institutions and provide additional options for consumers currently excluded from the lending marketplace.   This week on The SCORE, we’re joined by Yazel Pardo, Director of Credit Risk at Patelco Credit Union. Patelco is a full-service, not-for-profit financial cooperative with 450,000 members nationwide. Yazel joins The SCORE this week to tell us how he expects consumers to manage the various headwinds expected in 2024, how industry consolidation among credit unions affects the consumer, and where new opportunities for increasing financial inclusion currently lie.   Listen in as Yazel explains how alternative data helps make credit accessible to local communities and furthers financial inclusion. 

As many outlets are currently reporting, in many parts of the United States, renting is now far cheaper than buying property. Various economic factors like interest rate hikes and rising costs have created a housing system in which many Americans are renting. But does being excluded from homeownership preclude renters from using those payments to build and improve credit scores? This week on The SCORE, we’re joined by Kristian Lund from Self Financial. Self is a credit-building platform working to increase economic inclusion and financial resilience through products that make building credit accessible. Kristian joins The SCORE this week to explain the advantages of including alternative data in credit scoring models, such as rental payments, and how it helps people create positive payment history and, in turn, strong credit scores.   Listen in as Kristian walks through how consumers can use positive financial history to build credit and move towards financial inclusion. 

What can $340 billion buy?  That figure was the commitment offered by corporations looking to help address historical injustices in American society and help close the racial wealth gap in the wake of the death of George Floyd.  This week, Donovan Duncan joins The SCORE to explore where corporations and communities currently stand with regard to making good on that commitment. Mr. Duncan is Executive Vice President at Urban Strategies, Inc., a national non-profit leader in the field of community development. Duncan is also Chairman of the Board at the Credit Builders Alliance and has decades of experience in ensuring communities are able to flourish and grow. Mr. Duncan explores the homeownership gap in communities of color and how lenders can best serve creditworthy borrowers currently excluded from one of the most significant creators of wealth in our economy.  

The U.S. economy is, in many ways, the envy of the world, and millions migrate annually to this country to participate and live out the ‘American Dream.’ However, inequitable access to the financial tools that preclude milestone moments, like purchasing a home, can become barriers to the ‘credit invisible’ or those otherwise unaccounted for in the financial services marketplace.  So, how can fintech leaders help broaden the tent, and what role does competition play in keeping the doors open to the U.S. financial system for underrepresented communities?  Silvio Tavares, President and CEO of VantageScore, joins The SCORE for his second appearance to provide his perspectives on VantageScore’s record growth in the past year and how the success of VantageScore 4.0’s mandated use for GSE-funded mortgages will be measured. Listen to Silvio’s comments here.

Do health and wealth go hand in hand?  Financial issues are commonly considered one of the primary sources of stress for many people and money is a well-documented reason for divorce, for instance.  But is there a real link between the two? And do your current money habits spell trouble for your long-term health? To help answer these questions, Dr. Sean Hundtofte joins The SCORE to explore the correlation between financial planning and wellbeing. Dr. Hundtofte has dedicated most of his career to household finance, and the insights he’s acquired over the years help power Solve Finance, a company that helps households optimize their finances using market data to their advantage while letting technology do the work for them. Simply put, Solve Finance makes “makes borrowing outcomes easy” for consumers.  Dr. Hundtofte explains the unexpected health benefits of planning for your financial future and how he uses behavioral finance concepts to make debt management simple in this week’s episode. 

This fall, an estimated 44 million borrowers will stretch their personal budgets once again, adding yet another item to their bottom line – a federal student loan payment. If you don’t know where to start your repayment journey, you’re not alone.  Dan Currell, CEO of the Digital Commerce Alliance and Former Deputy Under Secretary and Senior Advisor at the U.S. Department of Education, joins THE SCORE to help borrowers figure out where to start.  VantageScore partnered with Dan to create an FAQ titled “39 Answers to Student Loan Questions,” designed to help consumers map out their path to student loan repayment.   Listen in to learn more.

A year ago, VantageScore funded a pilot program in partnership with the Credit Builders Alliance aimed at using data and analytics to extend credit counseling and credit scoring information to areas of the United States with large concentrations of lower income consumers. Interested in the results? The latest episode of THE SCORE podcast features Dara Duguay, CEO of Credit Builders Alliance and Joe Lauchlan, a Financial Coach with the International Institute of Metropolitan Detroit. During the podcast they share how they leveraged VantageScore 4.0 in addition to new credit counseling capabilities to improve credit health in a measurable way. Did their VantageScore 4.0 credit scores improve? How are they doing now and what’s next? Listen here to learn more.

Is there a tradeoff between expanding the pool of potential mortgage eligible consumers and sacrificing risk management?  The Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, has mandated use of VantageScore 4.0 with a 3-year roadmap for implementation. Meanwhile, millions of creditworthy consumers are on the outside of the American Dream of homeownership, looking in.  On this week’s episode of The SCORE, we hear from Tony Hutchinson, Senior Vice President of Industry and Government Relations at VantageScore. Tony explains where we are on the road to VantageScore 4.0 implementation for GSE-funded mortgages, the positive reception to VantageScore from lenders, and the populations most impacted by maintaining the status quo. 

We’ve all seen ads beckoning consumers to ‘FIX YOUR CREDIT’! But – is this possible, and perhaps more importantly – are consumers helped or hurt by ‘credit repair’ agencies? On this week’s episode of The SCORE, hear from Dan Smith, President and CEO of the Consumer Data Industry Association (CDIA). Beyond leading the CDIA, Dan Smith has over 20 years of experience navigating the complex consumer credit ecosystem.  Dan joins THE SCORE to walk through the challenges faced by underbanked Americans talks us through how consumers can advance their lives by focusing on their credit files, credit reports and other factors that significantly impact their financial futures.

It's maybe the least understood aspect of credit scoring: a 700 score today will represent a totally different risk during the next credit cycle. And as macro-economic issues change, so does the risk that any score represents.   During the pandemic, consumer credit health was positively impacted by various factors such as government stimulus payments, suspended student loan obligations, and resulted in increased personal savings rates. As a result, and logically, scores rose. The economy is much different now and many consumers have struggled with their debt obligations. The looming resumption of student loan payments further stands to impact credit scores.    Hear from Dr. Rikard Bandebo, Executive Vice President and Chief Product Officer at VantageScore on The SCORE Podcast as he “peels back the onion” on credit scores. Listen in as Dr. Bandebo explains credit scores as measures of a consumer’s relative risk of default, what to expect in the coming months as student loans become due again, and what an estimated 40 million impacted borrowers can do to prepare.