VantageScore Challenges FICO’s Grip on Credit Access (Full Transcript)

[00:00:00] Speaker 1: Americans are swimming in debt. Over the last decade, household debt has climbed to nearly $19 trillion, with more than 70% in mortgages. It sounds like a lot, but on the flip side, there are also millions of Americans who have been locked out of borrowing, something that, for decades, has required a FICO score. Want a car? You need FICO. Want a house? FICO. A business loan? FICO. And some 90% of top lenders use their scoring model.

[00:00:27] Speaker 2: Well, there's this inherent catch-22, right? Because in order to get ahead in life, you often need access to credit. But to get access to credit, you need a credit history. To get a credit history, you need credit in the first place. There's estimates that there's tens of millions of people who have fallen through the cracks when it comes to FICO. This is an especially significant problem for younger Americans who may not have built up that credit history, yet it's also often a problem for people of color and for immigrants who are sort of new to the financial system.

[00:01:04] Speaker 1: But now, FICO finally has some competition from a company that markets a more inclusive way of measuring credit. VantageScore promises to open the door to people who have been shut out from credit cards and mortgages.