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Subject: ANALYSTS' COMMENTS

VantageScore Announces Default Risk Index Quarterly Update: Lenders' Risk Appetite: Everything in Moderation


STAMFORD, CT--(Marketwired - August 30, 2017) - VantageScore Solutions, LLC, developer of the VantageScore® credit scoring model, today announced the quarterly update to its Default Risk Index (DRI) data series. The VantageScore DRI tracks the amount of default risk assumed by lenders in four U.S. consumer-loan categories: mortgage, bankcard, auto loans and student loans.

The update, which encompasses lender activity for the first quarter of 2017, is located in interactive infographics at www.DefaultRiskIndex.com and in a spreadsheet containing the full data series, which is available for download at the site.

Changes to specific index values are summarized in the following table:

   
   VantageScore Default Risk Index: Update Summary, Q1 2017
Category  Total
Originations
 Total
Originations
vs. Last 
Quarter
 Probability of
Default (Weighted Avg.)
 Default
Risk Index
 DRI vs. Last
Quarter
 DRI vs. Same
Quarter Last
Year
Mortgage  $322.61 B  34%  1.11%  95.8  12.18%  4.8%
Bankcard  $90.70 B  4%  2.73%  97.2  .41%  2.1%
Auto  $148.72 B  1%  4.39%  99.5  11.42%  -8.13%
Student  $25.46 B  0%  19.37%  93.6  4%  -3.01%
              

The aforementioned update reflects several key points:

*Each risk profile is indexed to the beginning of the series, where the third quarter of 2013 equals 100. DRI profiles that are close to 100 show an equivalent risk activity to the 2013 benchmark; whereas, DRI profiles that are further from 100 distinguish risk activity that is either higher or lower than the benchmark (depending on the results).

About the Default Risk Index
The VantageScore Default Risk Index (DRI) and its website, www.DefaultRiskIndex.com, permit users to monitor the shifting quarterly risk profiles of loan originations in the mortgage, credit card, auto, and student loan categories. The DRI is derived using credit file data from TransUnion and VantageScore odds charts-tables furnished to VantageScore users that match values on the 300-850 VantageScore scale range with their corresponding probability of default (PD) values.

The Default Risk Index is a measure of relative changes in risk level, benchmarked against the third quarter of 2013, the first period for which data were compiled. Interactive tools at DefaultRiskIndex.com allow users to view trends for each loan category and freely download the data behind the charts.

The VantageScore Default Risk Index is provided as a free resource to institutional and individual investors, professionals in the securitization field, academics, and all others interested in systemic lending risk. It will be updated quarterly, with data reflecting loans issued in the preceding quarter.

VantageScore Solutions and TransUnion developed the DRI to highlight limitations in the traditional ways credit scores are used to evaluate risk for categories or pools of loans. Today's common practices -- using "weighted average" or "distribution by score band" to summarize risk -- are mathematically flawed. Reliance on those metrics can result in a miscalculation regarding the true credit quality of a loan pool as well as obscuring meaningful trends and leading a well-intentioned analyst to the wrong conclusions.

About VantageScore Solutions
Credit scores can impact many aspects of your life, everything from whether you are able to get a loan and how much interest you will have to pay to whether you are able to rent an apartment.

VantageScore Solutions, LLC (www.VantageScore.com) is the independently managed company that owns the intellectual property rights to the VantageScore credit scoring models and is the leader in scoring innovation. Recently introduced VantageScore models score 30-35 million consumers who typically are not scored by conventional models without relaxing standards. VantageScore credit scores are used by lenders, landlords, utility companies, telecom companies, and many others to determine your creditworthiness. By using the VantageScore model, these enterprises have access to many more consumers, and in turn, consumers have greater access to mainstream credit.

While there are many credit scoring models in the industry, the "win-win" for VantageScore is its innovative, highly predictive, patent-protected, tri-bureau scoring methodology that provides lenders and consumers with more consistent credit scores across all three national credit reporting companies. VantageScore is also the model tens of millions of consumers use to monitor their credit behaviors through dozens of websites and lenders who provide their users and customers with their credit scores for free. More than eight billion VantageScore credit scores were used in the 12-month period from July 2015-June 2016 by over 2,400 lenders and other industry participants, including 20 of the top 25 financial institutions -- an increase of nearly 40% over the previous 12-month period.

The company is celebrating its 11th anniversary in 2017.


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