Credit Scoring: A Cornerstone to Credit Extension and Management

The traditional methods of credit scoring—time-tested and statistically sound—remain excellent ways of assessing the creditworthiness of consumers. FICO Score 8, the dominant credit score in the United States, is leveraged by lenders because it’s a successful metric for profile performance and a reliable predictor of consumer behavior. Even so, the traditional models are ever-evolving, and the use of alternative data sources is opening new lines of business with consumers who have thin or nonexistent profiles. 

This Javelin Strategy & Research report takes a deep dive into the realm of credit scoring, looking at how the traditional models have evolved, how alternative scoring methods have found a foothold, new products and innovations in the space, and how lenders can leverage these tools to more effectively serve customers.

Key questions discussed in this report: 

• Are credit scores an effective tool for risk management? 
• How do alternative credit scores affect the market? 
• What new products and innovations are in the credit score market? 
• What are the effects of credit score migration on lending?

Companies Mentioned: 

American Express, BoomPay, CFPB, Chase, Citi, Equifax, Esusu, Experian, FHFA, FICO, FannieMae, FreddieMac, Kikoff, LexisNexis, NovaCredit, OCC, PayYourRent, Petal, Piñata, RentReporters, RentTrack, Self, StellarFI, TomoCredit, TransUnion, U.S. Bank, VantageScore, Wells Fargo, X1