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According to the presentation, a great many of the individuals who are now scoreable using the VantageScore credit score model have excellent credit profiles, significant incomes, and are employed as shown below.
Generational baby boomer age 47-65
Adverage Vantage Score: 749
Adverage Income: 57,200
Adverage annual card: 14,563
Top job codes: professional/ technical/upper management executive/skilled trade/ or retired in those areas
Some borrowers who are deemed subprime by traditional credit scoring criteria are actually
quite creditworthy and identified as prime or near-prime consumers when using the more inclusive VantageScore model.
Consumers can fall into the subprime category for a variety of reasons that may not impact
their ability to repay a loan. For example, they may have thin credit files, be infrequent users of credit or be classified as subprime because there is insufficient data in their credit files to generate a traditional credit score. Based on a VantageScore Solutions’ study, among infrequent users of credit, 15.5 percent were found to have either prime or super-prime risk profiles.
And among new entrants to the credit scene, which include recently graduating students, immigrants or recently divorced consumers, 26.5 percent were found to have either prime or super-prime risk profiles.
Under traditional scoring models, many of these consumers would be mislabeled as being high risk or wouldn’t be provided a credit score at all, which would leave them little alternative but to seek credit from lenders outside of the mainstream credit industry who may charge exorbitant interest rates.
Mr. Burns also presented the case for reporting and using renter payment history. For 96 million Americans, rent payments account for a major portion of their spending. Chart is shown in my live presentation
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