Model Governance for the Bankcard Industry

Converting to a New Credit Scoring Model: Regulatory Focus

VantageScore Solutions SVP Sarah Davies and Chris Carroll, president, Carroll Financial Services Advisors, discuss how to implement a new credit-scoring model in a way that satisfies financial-services regulators.

Empowering governance and transparency

Executives responsible for model governance must continuously monitor the use of analytical tools, including credit scoring models, to ensure they meet regulatory requirements and institutional policies.

From its inception, VantageScore Solutions has supported this effort with a level of transparency unprecedented in the credit scoring industry. VantageScore Solutions is the first model developer to publish annual validation data, characterizing model performance on bankcard, auto and mortgage loans.

Regulators have explicitly communicated that they have no brand preference with respect to credit scoring models and that they support competition in the market.

While performance may be king, transparency is queen. Expecting a third-party model provider to provide transparency is not only expected, it's reality:

[chart]View enlarged

Additional resources

A user guide worth using

Credit card issuers that use the VantageScore model are provided a user guide that includes deep-dive information on:

  • Development sample design
  • Performance definition
  • Modeling sample treatments
  • Segmentation analysis
  • Final model design
  • Compliance
  • Adverse action codes
  • Validation methods at development and annually

Reason code transparency

VantageScore Solutions is committed to making scores and the factors that determine them clear to consumers. VantageScore publishes the ReasonCode.org website in English and Spanish, to expand on the short explanatory statements that accompany score notifications. This commitment to transparency has won VantageScore acceptance among regulators and many of the nation’s most heavily regulated institutions.

Stay in the know

Opt in to receive email notifications of credit-scoring industry news, research, whitepapers and more from VantageScore.