STAMFORD, Conn. — Used by top auto lenders to best gauge consumer credit conditions given the current economic environment, VantageScore Solutions recently revealed the latest version of its credit scoring model.

VantageScore 2.0 came through a production process orchestrated by each of the three credit reporting companies — Equifax, Experian and TransUnion. 

The new solution was originally launched back in October and was available for testing since that time. Officials revealed the offering is now fully implemented at each credit reporting company.

Sarah Davies, senior vice president of product management, analytics and research, explained one of the driving forces behind the creation of VantageScore 2.0 was a significant change in consumer credit repayment behavior. Davies insisted that all credit models should be updated regularly to ensure they remain as accurate and predictive as possible.

She said VantageScore 2.0 shows an improved performance over the original version across the main industries where credit scores are used, including auto lending.

The newest installment was built using a development sample compiled from two performance time frames: 2006 through 2008 and 2007 through 2009. Davies noted each time frame contributed 50 percent of the sample, reflecting more recent credit conditions

By using a development sample from this extended window, Davies contends that VantageScore 2.0 can capture both a broad and recent set of consumer behaviors across the full spectrum of economic events. She said this process can reduce algorithm sensitivity to highly volatile behavior that can be found in a single time frame and extend performance stability over time.

Barrett Burns, VantageScore Solutions' president and chief executive officer, also stressed that since VantageScore's original release back in 2006, ongoing research and analytic efforts were conducted on the algorithm to maintain the predictive performance of the solution. Burns said these efforts are ongoing. 

The VantageScore credit risk model was first introduced in March 2006 in direct response to a demand for a generic credit score model that would be more predictive, score more people and offer more consistent consumer scores across all three credit reporting companies, Burns noted.

"VantageScore 2.0 is built on a blend of consumer credit behaviors from 2006 to 2009, which creates a highly predictive score," Burns highlighted.

"We've recently experienced a variety of economic scenarios, which have impacted consumer behavior of the past several years," he continued. "This includes an increase in foreclosures in the housing market and changing payment priorities among consumers."

Two of the three credit reporting companies shared upbeat assessments about the new version.

"We believe VantageScore 2.0 will serve financial institutions well in this post-recession environment. The implications associated with the recent economic downturn, which adversely affected the credit of many consumers, can now be assessed via this scoring model," explained Steven Sassaman, executive vice president in TransUnion's financial services business unit.

"TransUnion offers a myriad of scoring models to our customers, and we strongly believe that VantageScore 2.0 will be tremendously beneficial to the financial industry in managing risk in their portfolios," Sassaman continued.

Kerry Williams, group president of Experian Credit Services and Decision Analytics, offered a similar evaluation.

"Given the dramatic shifts in today's credit environment, lenders need information and tools that reflect these changes to make sound lending decisions," Williams noted.

"VantageScore 2.0 delivers an even greater performance lift to provide a higher level of confidence in risk decisions when including the score in the underwriting and lending process," Williams concluded.