It’s hard to buy a home with a low credit score and almost impossible for people who have used credit so seldom that a numerical credit score can’t be generated.
VantageScore analyzed the population of consumers who are conventionally unscoreable – those that fail to meet the minimum scoring requirements of widely used conventional credit scoring models. Their number has grown from approximately 30-35 million in 2010 to approximately 40 million in 2018.
Overall, the proportion of the adult population that is conventionally unscoreable remains unchanged at close to 16 percent.
In Florida, 16.7 percent of the credit-age population has no credit score. Minnesota has the lowest percentage of non-scoreable residents at 11.4 percent; West Virginia has the most at 21.4 percent.
Through no fault of their own, these consumers wouldn’t meet the basic requirements for automated underwriting for a mortgage or other loans. As a result, they could be turned down or face potentially unfair pricing and terms.
To perform the analysis, VantageScore used a random, anonymous sample of 15 million consumer credit files obtained from the three nationwide credit bureaus. It calculated the proportion of consumers who would satisfy conventional model scoring requirements or fall into one the four groups of conventionally unscoreable consumers:
- new to market
- infrequent credit user
- rare credit user
- no accounts
The proportions were then applied to the overall US adult population based on 2017 U.S. Census.
As the overall U.S. population has increased, so has the number of consumers who cannot be scored by conventional credit scoring models. According to the latest 2017 U.S. Census, the overall population grew to 326 million and the number of conventionally unscoreable consumers who can now be scored with the VantageScore 4.0 model increased to approximately 40 million.
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