STAMFORD, Conn. — This week, VantageScore Solutions — the
company behind the VantageScore credit scoring model – rolled out its newly
constructed credit scoring solution, VantageScore 3.0.

The company highlighted the new model provides up to 25
percent predictive improvement over earlier models and has the ability to
formulate a score for 27 to 30 million previously unscoreable consumers — a
group officials believe is larger than the population of Texas.

The scale used in the new model is 300 to 850, a change from
earlier VantageScore models.

The company indicated extensive testing of the VantageScore
3.0 model showed that its predictive strength "well exceeds" other credit
scoring models across industries and applications, but in particular within the
key prime and near-prime consumer populations.

VantageScore Solutions president and chief executive officer
Barrett Burns said the new scale of 300 to 850 will help facilitate easier model
implementation for lenders and more familiarity for consumers.

"The VantageScore 3.0 model is both a new model, and new
path forward for VantageScore Solutions and the credit scoring industry. The
model was built with a lender's implementation and risk management needs in
mind, in conjunction with a deeper understanding for what information consumers
need to become better managers of their own credit," Burns said as the company
unveiled the new product at this week's Consumer Bankers Association's annual
gathering.

"Today's competitive lending environment dictates that
lenders need access to as many creditworthy consumers as possible within their
target universe, demanding the highest level of predictive performance from the
credit scoring models they use," he continued. "The VantageScore 3.0 model
facilitates this, and provides risk managers a level of predictiveness that
will allow them to confidently extend credit to tens of millions of consumers
that were previously invisible to them so that those consumers have a greater
chance to access mainstream credit, which is one of our principle goals."

As another measure to aid both lender implementation and
consumer understanding, VantageScore Solutions reduced the number of reason
codes to less than 80, simplified the reason code statements within the
VantageScore 3.0 model and wrote them in plain English to aid consumer
understanding.

How VantageScore 3.0 Scores Millions More Creditworthy
Adults

The company explained the VantageScore 3.0 model reaches a
new milestone by providing a predictive credit score to 27 to 30 million more
adults than traditional scoring models.

According to VantageScore, the model accomplishes this by:

—Developing a 13th scorecard to generate a predictive credit
score for those with little-to-no recent credit activity.

—Factoring non-tradeline credit data such as collections,
public records and inquiries when active tradeline data is not present.

—Utilizing tradeline data in consumer credit files that is older
than 24 months but remains predictive, an analytic breakthrough and major
benefit to infrequent credit users.

—Using rent, utility and telecom data when it is present in
a consumer's credit file.

How VantageScore 3.0 Achieves Transformative Predictive Lift

The company insisted the VantageScore 3.0 model improves
upon an already strong VantageScore platform used in earlier models.

In performance tests against the VantageScore 2.0 model and
benchmark models provided by the three leading national credit reporting
providers, officials noted the VantageScore 3.0 model demonstrated significant
gains in predictiveness.

More importantly, the company pointed out the model achieves
up to 25 percent predictive improvement among prime and near-prime consumers,
which is traditionally where lenders focus lending strategies and is the most
sought after group among most mainstream lenders.

Similar double digit results are achieved within the same
population for originations in the real estate, auto, and bankcard segments.

Other performance achievements seen with the VantageScore
3.0 model include:

—80 percent of consumer scores are within 20 points across
the three national credit reporting companies

—Nearly identical risk alignment across all three credit
reporting companies

—Maximum predictive performance for both originations and
account management scenarios

The company emphasized the key driver of the VantageScore
3.0 model's improved performance is using more granular data from all three credit
reporting companies. The granularity of the data allowed model designers to select
150 of the most predictive characteristics from an estimated 900 behavioral
characteristics that were tested.

Among the predictive attributes of this data are:

—Detailed mortgage tradelines separating first mortgage from
other mortgage related transactions, facilitating greater intelligence with
regard to a borrower's mortgage-related debt.

—More distinct definitions of data, such as the ability to
identify student loan accounts from other types of installment accounts.

—More specific measurement of delinquency and default
timeframes, which provides for an improved representation of a consumer's
payment behaviors.

New Website to Enhance Solution Upgrade

As part of a relaunch of its own website, VantageScore
Solutions has added www.ReasonCode.org, a microsite aimed at further explaining
reason codes overall to consumers as well as providing details about what each
reason code means in plain English.

Features of ReasonCode.org include:

—A primer on what reason codes are and how they are used

—Searchable and interactive reason code definitions and
explanations

—A glossary of common reason code terms

Reason codes are two-character numeric codes accompanied by
a short statement explaining to a consumer why their credit score wasn't
higher. Consumers are given the reason codes and statements in various credit
score disclosure notices and adverse action letters sent by lenders, among
other times when a credit score is provided to a consumer. The simplified
reason code explanations were written specifically with a focus on consumer
understanding.

More Highlights of VantageScore 3.0 Model

The company stressed the launch of the VantageScore 3.0
model represents a major analytic breakthrough for the credit scoring market as
well as a major shift from what it dubbed, "business as usual" among credit
score developers.

Other unique aspects of the VantageScore 3.0 model include
the following:

—Easier to implement: Officials contend a 300 to 850 score
range makes implementation of the VantageScore 3.0 model is easier for lenders.
Additionally, as with all VantageScore models, the VantageScore 3.0 model is
deployed across all three national credit reporting companies reducing score
variance and producing nearly identical risk alignment, leading to added
confidence in lending decisions.

—Built using 45 million anonymous credit files: Officials
indicated the VantageScore 3.0 model was built using a much larger database of
anonymous consumer credit files. They explained Each credit reporting company
contributed a database consisting of 15 million anonymous credit files
containing more granular data. By building the VantageScore 3.0 model on such a
large database, VantageScore believes the model delivers a higher level of
predictiveness by capturing a larger sample of consumer behaviors and product
types.

—Data sample from blended timeframes: The data sample used
to build the VantageScore 3.0 model was developed on consumer behavior from two
different two-year timeframes: 2009—2011 and 2010—2012. Officials noted each
performance timeframe contributed 50 percent of the model's development.
Developing the VantageScore 3.0 model over the extended window reduces the
model's sensitivity to consumer behavioral shifts over different volatile
periods.

—Special treatment for victims of a natural disaster: VantageScore
acknowledged lenders have long had the ability to indicate accounts belonging
to natural disaster victims when reporting account activity to the credit
reporting companies. When accounts are reported with the natural disaster
reporting code, the account is not counted in the calculation of a credit
score. This has meant that both positive and negative information is
potentially invisible to a consumer's credit score. With the VantageScore 3.0
model, only information that would negatively impact a consumer's credit score
is "set to neutral" so that consumers can continue to benefit from information
that would have a positive impact in the event they are victims of a natural
disaster.

More details about the VantageScore 3.0 model, VantageScore
Solutions' new logo, website and branding initiative all can be found at
http://www.VantageScore.com.


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