The so-called VantageScore credit scoring system released last week by the three major consumer credit bureaus - Experian, Equifax, and TransUnion - is not expected to affect securitizations in the short-term, market participants said. Since neither Standard and Poor's, Moody's Investors Service, Fitch Ratings, nor the GSEs, can yet use the VantageScore product, its impact on the securitization industry is anticipated to be minimal at this point. The VantageScore is being marketed as an alternative to the widely used Fair Isaac Corp. FICO score.
Some wondered how soon or if the product would take off at all, since lenders often need to base lending decisions on whether the loans they make will be purchased in the secondary market - and because scores produced from the VantageScore can not, at this point, be run through models used to calculate risk for secondary market investors. "I think its prospects are pretty bleak, because they didn't get a buy-in from the rating agencies or the GSEs yet, so I don't see how anyone could actually use it - unless a lender is just in the market to originate loans and keep them," said Mark Adelson, head of structured finance securities research at Nomura Securities International.