New Independent Research Finds VantageScore 4.0’s Increased Reliability Unlocks Millions in Auto ABS Market Savings

SAN FRANCISCO--(BUSINESS WIRE)--Oct 16, 2026--

New research from OGMA Risk and Analytics reveals that the VantageScore 4.0 credit scoring model unlocks significant financial efficiencies in the auto asset-backed securities (ABS) market, potentially reducing financing costs, improving credit risk assessment and expanding access to capital. The whitepaper, titled “ VantageScore 4.0 in the Auto Loan ABS Market: What the Data Shows on Reach, Performance and Reliability,” finds that, on an illustrative $1 billion Near Prime auto ABS transaction and under stated assumptions, using VantageScore 4.0 could release approximately $11 million in credit enhancement and generate approximately $4 million in cost savings over the life of the deal. These findings demonstrate that VantageScore 4.0 can help auto lenders and securitization market participants more accurately evaluate credit risk while improving the economics of auto loan securitizations.

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"Credit scoring is fundamental to how auto loans are originated, securitized and ultimately valued by investors," said Rikard Bandebo, EVP, Chief Strategy Officer and Chief Economist at VantageScore. "OGMA’s research demonstrates that VantageScore 4.0 can deliver meaningful financial benefits throughout the securitization process. By providing a more reliable assessment of credit risk, VantageScore 4.0 has the potential to unlock millions of dollars in capital efficiencies while expanding opportunities for creditworthy consumers who have historically been overlooked by traditional scoring models."

The whitepaper evaluates VantageScore 4.0 across three critical measures: the ability to score more consumers, the credit performance of newly scored borrowers, and the reliability of credit score bands in predicting losses. The analysis uses a nationally representative 1-in-20 sample of the U.S. consumer credit population covering 2023 through 2025, with 24 months of observed credit performance following each consumer's observation point.

Key findings from the research include:

MORE RELIABLE CREDIT SCORING IMPROVES RISK ASSESSMENT: VantageScore 4.0 delivers significantly greater consistency in predicting credit losses than traditional scoring models. Within comparable credit score bands, bad rates vary 75% less than those associated with a generic account management score on existing accounts and 45% less than those associated with a generic origination score. This improved reliability provides auto ABS issuers, investors and rating agencies with a more dependable measure of underlying credit risk, potentially enabling more precise pricing and credit enhancement requirements.

NEWLY SCORED CONSUMERS DEMONSTRATE COMPARABLE CREDIT PERFORMANCE: Consumers scored exclusively by VantageScore 4.0 recorded a 24-month bad rate of 18.3%, compared with 20.0% for consumers also scored by traditional models at equivalent credit scores. Additionally, 46% of newly scored consumers have VantageScore 4.0 credit scores of 620 or higher, demonstrating that consumers excluded by traditional scoring models are not necessarily higher-risk borrowers. The findings reinforce the ability of VantageScore 4.0 to identify creditworthy consumers without compromising risk assessment standards.

IMPROVED CREDIT RISK PRECISION COULD UNLOCK MILLIONS IN CAPITAL EFFICIENCIES: On an illustrative $1 billion Near Prime auto ABS pool, the combined benefits of broader scoring coverage, improved risk differentiation and greater scoring reliability could release approximately $9 million to $11 million in credit enhancement and save approximately $2 million to $4 million in costs over the life of the deal. These modeled benefits reflect the potential for more accurate loss projections, reduced capital requirements and improved securitization economics.

As the largest segment of the consumer asset-backed securities market, auto ABS relies heavily on credit scores to evaluate collateral quality, estimate expected losses and determine the credit enhancement required to support securitized transactions. However, traditional credit scoring models leave millions of consumers without a score, creating challenges for lenders seeking to originate loans and issuers seeking to finance those loans through capital markets transactions. VantageScore 4.0 addresses these limitations through its use of trended credit data, available alternative credit data and advanced machine learning techniques. By evaluating consumers with shorter or less active credit histories, the model expands the population of scorable borrowers while delivering more consistent risk differentiation across credit score bands.

For auto ABS issuers, VantageScore 4.0’s greater scoring coverage and improved reliability should support more efficient loan pool construction, more accurate credit enhancement sizing and stronger investor confidence in reported credit risk metrics. For lenders, the findings point to opportunities to improve capital efficiency and expand responsible access to auto financing.

OGMA’s research underscores the important role VantageScore 4.0 plays in strengthening the transparency, efficiency and predictive accuracy of consumer credit securitization markets.

To download and read the full whitepaper, please visit VantageScore’s website.

About VantageScore®

VantageScore is the fastest-growing credit scoring company in the U.S., and is known for the industry’s most innovative, predictive and inclusive credit score models. In 2024, usage of VantageScore increased by 55% to hit 42 billion credit scores. More than 3,700 institutions, including nine of the top 10 U.S. banks, use VantageScore credit scores and digital tools to provide consumer credit products or generate greater insights into consumer behavior. The VantageScore 4.0 credit scoring model scores 33 million more people than traditional models. With the FHFA allowing the immediate use of VantageScore 4.0 for Fannie Mae and Freddie Mac guaranteed mortgages, the company is also ushering in a new era for mortgage lending.

VantageScore is an independent joint venture company owned by Equifax, Experian and TransUnion.

New Independent Research Finds VantageScore 4.0’s Increased Reliability Unlocks Millions in Auto ABS Market Savings

WASHINGTON (AP) — Investments in pharmaceutical companies made on behalf of President Donald Trump increased significantly after he returned to the White House last year, with his portfolio adding millions of dollars in stock in firms that benefited from a Republican-backed law that shields certain medications from Medicare price negotiations, according to a report from congressional Democrats.

The report, released Friday by the Joint Economic Committee’s minority arm, found that Trump’s pharmaceutical stock holdings grew from a maximum reported value of $1.7 million in 2024 to as much as $56.2 million at the end of 2025. The report said that included up to $39.1 million worth of stock held in companies that benefited from exemptions to Medicare’s drug price negotiation program, which came through a provision in Republicans' 2025 tax and spending law.

Additional analysis of Trump's financial disclosures provided by committee Democrats showed that his investment portfolio bought as much as $2.55 million in shares of pharmaceutical companies benefiting from the exemptions on three dates before he signed the legislation in July 2025. That included up to $950,000 in purchases on July 1, 2025, the day the Senate passed the bill. His portfolio also bought as much as $1 million in AbbVie stock in August 2025, after the bill became law.

The Republican president’s wealth has grown since he took office last year through a web of business interests, many of which have benefited from the policy moves of his administration. The White House has repeatedly denied any ethics issues and accused Democrats of “attempts to fabricate conflicts of interest.”

The report also noted that the exemptions policy could leave some Medicare beneficiaries paying thousands of dollars more for certain cancer treatments and other medications than they would have if Medicare had been allowed to negotiate lower prices.

The findings come as Trump has made lowering prescription drug costs a central part of his healthcare policy, striking deals with pharmaceutical companies that his administration says will make medications more affordable for Americans, although drug pricing is based on a complicated set of factors.

Recent polling from The Associated Press-NORC Center for Public Affairs Research shows that most Americans think Trump is profiting off the presidency in unethical or illegal ways and is focused more on his wealth than on helping people like them.

Democratic Sen. Maggie Hassan, who leads the Joint Economic Committee’s minority arm, called the report’s findings “outrageous and yet typical from this president, who makes the American people foot the bill again and again for his own gains.”

Davis Ingle, a White House spokesperson, said Trump's stock and bond portfolio is independently managed by third-party financial institutions. He denied any conflict of interest.

“Neither President Trump nor any member of his family has any ability to direct, influence, or provide input regarding how the portfolio is invested or when investments are bought or sold,” Ingle said in a statement.

A law from President Joe Biden's Democratic administration allowed Medicare for the first time to negotiate prices for some of the costliest prescription drugs. Republicans' 2025 tax and spending bill expanded an existing exemption for medications developed to treat rare diseases or conditions, delaying when certain costly drugs could become eligible for negotiations or excluding them entirely, according to healthcare research nonprofit KFF.

Also known as the orphan drug exclusion, the carveout allows drug companies to continue charging lucrative prices that might otherwise have been reduced through Medicare negotiations.

Supporters of the change argued that a broader exemption would encourage drug companies to develop treatments for rare diseases. Critics say it allows makers of blockbuster medications to avoid negotiations that could lower costs for Medicare and its recipients.

The report estimated that Medicare beneficiaries receiving the cancer drugs Keytruda, manufactured by Merck, and Opdivo, by Bristol Myers Squibb, could pay roughly $5,000 more annually than they would if Medicare negotiated prices for the medications. Trump's portfolio includes stock in both firms.

The report also said that Trump's portfolio continued to buy and sell pharma company stocks throughout the first eight months of 2026, adding as much as $3.5 million in stock wealth in the sector.

All recent U.S. presidents have dumped their stocks before assuming office, put their money in broadly diversified funds or set up a “blind” trust so they couldn’t even know what they owned.

Trump has put his broader business interests in a trust managed by his sons. But the arrangement rejects the conflict of interest protections that his recent predecessors in office had instituted.

Associated Press writer Bernard Condon in New York contributed to this report.

President Donald Trump departs to sit with guests after speaking in the Rose Garden of the White House during an event for first responders, Thursday, Oct. 15, 2026, in Washington. (AP Photo/Julia Demaree Nikhinson)

President Donald Trump speaks in the Rose Garden of the White House during an event for first responders, Thursday, Oct. 15, 2026, in Washington. (AP Photo/Julia Demaree Nikhinson)

President Donald Trump speaks in the Rose Garden of the White House during an event for first responders, Thursday, Oct. 15, 2026, in Washington. (AP Photo/Julia Demaree Nikhinson)