VantageScore 4.0 was released in 2017 as the next-generation credit scoring model. While 3.0 remains the most widely seen by consumers, 4.0 is becoming a more significant tool for lenders due to its inclusion of “trended data.”
The Multi-Month Shift
The biggest advancement in version 4.0 is how it handles historical data:
- Snapshots vs. Trends: Instead of just looking at your credit balance today, 4.0 looks at how your balances have moved over the last 24 months.
- The “High” Utilization Case: If you have a high balance today but have been consistently paying it down for six months, 4.0 treats you better than if your balance just spiked this month.
- The “Low” Utilization Case: Conversely, if you have a low balance but have been consistently increasing it every month, 4.0 might flag your risk as higher despite the current “safe” utility percentage.
Tax Lien and Judgment Removal
VantageScore 4.0 was designed to be compliant with the National Consumer Assistance Plan (NCAP), which meant it successfully transitioned away from including civil judgments and tax liens, which were found to be poorly managed and often inaccurate data points.
Advanced Machine Learning (ML)
VantageScore 4.0 was the first to integrate advanced machine learning techniques to better model consumers with “thin-files” (fewer than three credit accounts) or no credit history in the last six months. This makes it a primary tool for “alternative” lenders.
For more on the current standard for lending, see our analysis of FICO Score 8.