Mercator Advisory Group's new report, Trends in Credit Scoring and Model Development, also examines market dynamics that have impacted credit risk in the U.S. over the last five years and the ways these shifts have impacted consumer credit scores.

"The ubiquity of credit scores and the relative obscurity of the processes that determine those scores is one of the more intriguing juxtapositions in the financial world. Though many consumers in the "banked" population in the U.S. can recite their credit scores from memory due to the broader access that credit bureaus have granted in recent years, probably only those who work in statistical science could take a meaningful stab at how each score is really determined," David Fish, senior analyst in Mercator Advisory Group's Fraud, Risk, and Analytics Advisory Service and author of the report comments. "Furthermore, lenders tend to develop and utilize custom scoring models and scorecards for nearly every distinct product line, further distancing credit decisioning data from the credit bureau information that consumers can access directly. For the financial institutions that employ either custom or generic credit scoring models for credit decisions, evolving regulations require a new level of transparency that the old "black box" approach to credit scoring can no longer satisfy."