A credit score that means more. To lenders, borrowers and the nation.

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1 A credit score that means more. To lenders, borrowers and the nation.

2 Driven by a mission VantageScore Solutions is the independently managed company behind the VantageScore model, an advanced credit scoring model that is easier for lenders to apply and simpler for consumers to understand. Now in its third iteration, the VantageScore model generates credit scores that are more accurate and more consistent for more people giving lenders and consumers alike the ability to make credit decisions with a higher level of confidence. VantageScore Solutions leads a charge first started by the three national Credit Reporting Companies (CRCs) Equifax, Experian and TransUnion which joined forces in 2006 to create the original VantageScore model. In addition to maintaining, validating, updating and licensing the VantageScore model, VantageScore Solutions educates lenders, consumers and regulators about the model s benefits.

3 Mission Consistent predictiveness matters. Every time. 1

4 Why VantageScore credit scores are better The VantageScore model generates consumer credit scores that are more predictive, more consistent and more stable by using industry-leading analytics to parse credit files differently than other, older models do. The result is a 21st-century approach that leverages patented and patent-pending techniques to create a robust credit scoring platform that is easier for lenders to implement and adds the ability to score up to 35 million more people than other models. Who uses the model More than 8 billion VantageScore credit scores were used from July 2015 through June 2016, by over 2,400 lenders and other industry participants including 20 of the top 25 financial institutions. It s not just lenders, either. Many of the most sophisticated secondary market participants use the VantageScore model to help evaluate and monitor risk, and to price and benchmark securities more accurately. Credit rating agencies accept loans based on the VantageScore model, and it s the dominant model used in the valuation of previously issued, private-label mortgage-backed securities. Among them: Fitch Ratings. Fitch Ratings accepts loans based on VantageScore credit scores, and has fully incorporated the VantageScore model into ResiLogic 2.1, Fitch s flagship quantitative model for credit risk analysis at the individual loan and pool level for residential mortgages. Standard & Poor s. Standard & Poor s clients can include the VantageScore model in collateral characteristics when submitting portfolios of residential mortgage loans for rating purposes. Major industry-platform standards have the VantageScore model embedded, including MISMO and all major vendors that provide software systems that enable lenders and credit bureaus to communicate. In addition, both Standard & Poors and Kroll Bond Rating Agency have rated pools of consumer loans underwritten using VantageScore credit scores without bias. 2

5 What makes VantageScore models different The mathematical underpinnings of the VantageScore platform allow lenders to score borrowers and manage their portfolios with more confidence, because it can: VantageScore Overview Better predict the likelihood of future serious delinquencies on any type of account, and allow lenders to make better credit decisions and evaluate risk. Generate credit scores that are more consistent across CRCs regardless of which one provides the score so that score differences are minimal and can be attributed to differences in credit file information. Provide credit scores to millions of previously unscoreable consumers. Produce scores that are more stable across fluctuations in the market and consumer spending habits. How lenders obtain the VantageScore model Equifax, Experian and TransUnion independently market and sell the VantageScore models and VantageScore credit scores through licensing agreements with VantageScore Solutions. VantageScore Solutions LLC is a joint venture whose members are the nation s three major credit reporting companies Equifax, Experian and TransUnion. VantageScore Solutions retains the rights to the VantageScore credit scoring model and the intellectual property on which the model is based. More information is available at 3

6 The VantageScore 3.0 model: Groundbreaking predictiveness The VantageScore 3.0 model pairs industry-leading analytics with more granular data from consumers credit histories to create the most predictive, consistent and stable credit scoring model ever. It delivers scores that are: More predictive. The VantageScore 3.0 model delivers superior predictive accuracy among prime and near-prime consumers, typically the most desirable segment for any lender. That performance increase boosts lenders ability to assess potential portfolio risks. More consistent. VantageScore 3.0 is a true tri-bureau model, so it produces nearly identical risk assessments when pulling scores from multiple CRCs. That s because it uses a patented process to ensure that if at least two CRCs have the same piece of data, it gets interpreted the same way. This assures lenders get a more consistent picture of a consumer s credit payment behavior, regardless of which CRC provides the score. 3.0 More inclusive. The VantageScore 3.0 model can score up to 35 million more people than traditional models. That s because it looks at more information in greater detail and over a longer period of time than other models. For instance, VantageScore 3.0 looks at a minimum of 24 months of a consumer s credit history, rather than the six months used by traditional models, and it considers other details now available from the CRCs. This allows the model to score millions of creditworthy people who have been unable to get a score before and have therefore been challenged in getting credit. More consumer-friendly. The number of reason codes generated by the VantageScore 3.0 model have been cut by nearly half, with each one rewritten in clear, easy-to-understand language. And there s now an online resource (ReasonCode.org) to help consumers understand how codes impact their credit scores a problem that has long affected the credit scoring industry. More stable. The VantageScore 3.0 model uses data blended from two different post-recession timeframes, and , to capture a broad development sample of recent consumer behaviors, including activity at the height of and following the economic crisis. This reduces model sensitivity to highly volatile behavior that can be found in a single timeframe, extending performance stability. More familiar. The VantageScore 3.0 model generates credit scores that range from 300 to 850, a numerical scale that is similar to other models and more accommodating to existing systems. More versatile. Each scorecard is optimized to provide maximum performance for origination and account management requirements. 4

7 CRC CRC Log odds 90+ days past due VantageScore 3.0 The VantageScore 3.0 model returns consistent results across CRCs 8 6 CRC Score range 5

8 Visit VantageScore.com to find additional information. Lenders interested in learning more about how the VantageScore 3.0 model can improve their credit decision-making power should contact their CRC sales representative. Equifax: Experian: TransUnion: VantageScore is a registered trademark of VantageScore Solutions, LLC VantageScore Solutions, LLC. All rights reserved. Rev. 10/16