Scoring Credit Invisibles: Using machine learning techniques to score consumers with sparse credit histories

Over the past months, much has been made about the potential for using machine learning techniques to improve the analysis of risks of consumer lending. Much of the discussion tends to be hypothetical or concerns applications that are outside the realm of credit decisioning. The development of VantageScore 4.0 showcases how these technologies can be harnessed in a way that marries both the latest innovations and current compliance considerations. By using a score that incorporates these techniques, lenders in turn can take advantage of the most recent model improvements with relative ease.