VantageScore is an innovative generic credit score model that simplifies and enhances the credit process for both consumers and credit grantors. It offers a highly predictive score with a consistent interpretation of consumer credit files across all three major credit reporting companies (CRCs) – Equifax, Experian and TransUnion.

VantageScore Features

* Predicts the likelihood of future serious . . . → Read More: The Benefits of VantageScore]]>

vantageScore

VantageScore is an innovative generic credit score model that simplifies and enhances the credit process for both consumers and credit grantors. It offers a highly predictive score with a consistent interpretation of consumer credit files across all three major credit reporting companies (CRCs) – Equifax, Experian and TransUnion.

VantageScore Features

* Predicts the likelihood of future serious delinquencies (90 days late or greater) on any type of account
* Returns a score range of 501-990 (higher scores represent a lower likelihood of risk)
* Consumer score is based primarily on a 24-month review of a consumer’s credit file
* Includes up to four score factor codes and a fifth FACTA reason code (Spanish version available)
* Can be accessed from all three CRCs
* Does not consider “authorized-user” tradelines to assess credit risk

Overview of VantageScore Benefits

Limits score variability across credit reporting companies: Leveled characteristics across Equifax, Experian and TransUnion ensure that any score differences for the same consumer are attributable to content differences in the consumer file, not the scoring algorithm.

Powerful risk prediction: Advanced segmentation techniques were used to create a strong, robust model. This results in a strong separation of good and bad performing accounts and the ability to assign meaningful and effective cut-offs.

Effective risk management: Some risk models are unable to score a significant percentage of consumers due to insufficient credit information. VantageScore provides predictive scores on more consumers with limited credit histories, thereby reducing the need for manual underwriting.

Universe expansion: VantageScore was developed using a patent-pending analytical approach that provides lenders with access to a larger pool of scoreable consumers while maintaining accuracy in risk assessment. With this capability, VantageScore plays a vital role in making credit more accessible to creditworthy consumers while creating the corresponding opportunity for lenders.

The Vantage Score, technically spelled VantageScore, is a credit rating  system developed by the top three credit  agencies: Experian, Equifax, and TransUnion. It was created to directly compete with the Fair Isaac Corporation’s FICO Score, which is currently the most widely used credit scoring  system. Although the three agencies responsible for the new system tout . . . → Read More: What is a Vantage Score?]]>

Vantage_Score

The Vantage Score, technically spelled VantageScore, is a credit rating  system developed by the top three credit  agencies: Experian, Equifax, and TransUnion. It was created to directly compete with the Fair Isaac Corporation’s FICO Score, which is currently the most widely used credit scoring  system. Although the three agencies responsible for the new system tout is as superior to the existing FICO system, many analysts are skeptical that it offers anything new.

Fair Isaac has been operating various credit risk score systems since the 1950s, and it is both the oldest and most widely used credit analysis system. The credit report industry has exploded in the past decade, with individuals paying premium fees to have up-to-date access to their credit reports and scores. This is in part due to the much easier accessibility that now exists as a result of the Internet, and to a growing concern on the part of consumers to track their credit score. Through introducing the Vantage Score, the top three credit agencies are no doubt hoping to claim a portion of the profits from an industry for which they already provide the data.

The existing FICO score rates an individual’s credit reliability on a scale of 300 to 850, taking into account such factors as percentage of credit being used, number of credit lines open, delinquent payments, and the types of credit involved. Although the algorithm for calculating a FICO Score is not transparent, Fair Isaac offers general guidelines that let individuals get a feel for why their score is where it is and what they might do to raise their score in the future. The Vantage Score rates an individual’s credit from 501 to 990, and at the same time gives each individual a letter grade ranging from A to F. The system the Vantage Score uses to calculate this rating is currently not disclosed, leading to some critiques that improving one’s Vantage Score is more of a hit-and-miss affair than improving one’s FICO Score.

Consumers can purchase their Vantage Score through any of the three major companies, all of which use the same algorithm for determining the final Vantage Score. Because the data they use may have small discrepancies, however, it should be expected that one’s Vantage Score might differ slightly between the three agencies. Ultimately, the benefits the Vantage Score system offers over the FICO Score system seem to be largely illusory. Although the credit agencies tout their letter grade system as being easier to understand and present the uniformity of information as a major bonus, in reality, the letter grade is a simple conversion from the numeric score, and the FICO Score has always offered the same uniformity. While the Vantage Score might see some success because of the heavyweights behind it, it will likely coexist alongside the FICO Score for many years to come.

The Vantage Credit Score Explained.

This is the first of five posts relating to credit scores and credit history. If you ordered a credit score along with your Experian credit report, you probably got a VantageScore and wondered “what the heck is this?” It’s a new credit score developed by the three credit bureaus . . . → Read More: The VantageScore: Another Credit Score?]]>

Vantage Credit Score

The Vantage Credit Score Explained.

This is the first of five posts relating to credit scores and credit history. If you ordered a credit score along with your Experian credit report, you probably got a VantageScore and wondered “what the heck is this?” It’s a new credit score developed by the three credit bureaus (Experian, TransUnion, and Equifax) to compete with the FICO score.

How Does the VantageScore Work?
The VantageScore is derived similarly to the FICO score, but uses a few additional scoring metrics. The score range is wider and higher, and you receive a letter grade in addition to your number.

FICO scores range from 300 to 850, while VantageScores range from 510 to 990. Each 100-point range is also assigned a letter score from A to F. Scores of 900-990 are the equivalent of an “A.”

Although both formulas are proprietary, experts say the scores are based on several factors.

The FICO score is calculated with the following factors:

* 35% payment history
* 30% outstanding balances
* 10% types of credit you hold (loans, credit cards, etc.)
* 15% credit history length
* 10% recent history

The VantageScore adds a few factors and changes the scoring model slightly:

* 32% payment history
* 23% amount of credit you’re currently using
* 15% credit balances
* 13% length and depth of credit history (kinds of credit and age of accounts)
* 10% new credit accounts and inquiries
* 7% total available credit

Who Uses VantageScores?
I couldn’t find much evidence to date that lenders are using the new scores. The score was introduced in 2006, so most lenders are still testing its use versus the FICO score. If you’re planning to apply for a mortgage, take out a car loan, or just want to know what the lenders are seeing, buy your FICO scores. You could ask your potential lenders if they use VantageScores, but I wouldn’t buy them unless they say they do.

Are the Scores the Same for All Bureaus?
Each credit bureau computes an individual VantageScore using the information they have in their files. Some of your accounts may not be reported to all the bureaus, so there could be some variation.

How Does the Score Compare to the FICO?
We discovered the VantageScore when my husband checked his credit report and requested his credit score along with it. We were confused when we saw this strange number and letter grade, so we ordered his FICO score and Experian report from MyFico.com. The FICO score was 20% higher than the VantageScore, a significant difference that could impact his interest rate. If we were applying for a mortgage today, we’d want that top score used!

What Does It Mean for You?
Currently, the score means nothing for you. However, it’s possible that lenders will opt for these scores in the future. They’re cheaper than FICO scores, so smaller institutions might opt for them sooner. On the other hand, bankers don’t like change; they might opt to stick with the score they know for several more years.

It appears that you can no longer buy your FICO score from Experian. The other two bureaus still sell them rather than VantageScores. That does make me wonder how good the scores really are if the other two bureaus don’t sell them to consumers. I suggested that my husband call Experian to demand a refund, but he pointed out that they asked if he wanted to buy his “credit score,” not his “FICO score.” Technically, they didn’t lie, but I think it’s very deceptive marketing. Most people don’t know about VantageScores, and everyone knows about FICO scores. If you see the words “credit score,” you assume “FICO score.”

If you’re very curious, go buy your VantageScore from Experian, but I would wait until there’s some evidence that the score is in use. Unfortunately, that means you can only get two of your three FICO scores for the lower fees charged by the credit bureaus. FICO will only sell them bundled with a credit report for $15.95 each. Want to see your FICO score for free? Get a Washington Mutual credit card.

FICO (Fair Isaac Company) and Vantage credit scoring method primarily differs with the way it is used and calculated by the 3 major credit bureaus (Equifax, Experian and TransUnion). Although both are a major factor in the issuance of credit reports, both scores are used by credit companies in determining whether to grant . . . → Read More: An in Depth Comparison of Your FICO and Vantage Credit Score]]>

fico vantage score

FICO (Fair Isaac Company) and Vantage credit scoring method primarily differs with the way it is used and calculated by the 3 major credit bureaus (Equifax, Experian and TransUnion). Although both are a major factor in the issuance of credit reports, both scores are used by credit companies in determining whether to grant or not to grant a loan to an aspiring applicant.

Vantage score, according to studies is preferred by majority of those in need of loans because they can have a better chance in getting high scores as compared to the FICO scoring method. The Vantage credit scoring method is actually created by the 3 major credit reporting companies. It uses analytical techniques that give possible loan applicants high, predictive and consistent credit scores using a 24 month basis of collective experience from the consumer to be scored.

Another thing that has made the Vantage credit score popular is the fact that it returns score ranging from 501 as its lowest and 990 to be its highest. On the other hand, FICO’s method of calculating only has 850 to be its highest available score card as compared to Vantage scoring method. FICO also makes use of 5 variables (payment history, length of credit, new credits, amounts owed and types of credit used) while on the other hand, Vantage is based on payment history, depth of credit, recent credit, available credit, balance and utilization.

While we can say that indeed, FICO scoring method is old school, you should always be reminded that it is as important as any other data found in one’s credit report. There is still more than a few credit companies that prefer A FICO over Vantage because it has been their reference for years. Like they say, old habits are hard to forget.

Vantage scoring method was actually created by the 3 credit reporting companies with the aim to simplify the credit process and give consumers an advantage in scoring. Equifax, Experian and TrnasUnion is said to have joined their forces together to create a model and modern credit scoring method that will provide consumers with greater scores that remains consistent throughout the span of 12 months.

There are also things common to both scoring methods. Both are accessible to the 3 major credit reporting companies. Both can also be found in one’s annual credit report that is being studied not just by credit companies but by future employers as well. A credit score is seen to be the basis of how a person handles his finances, his reliability (if he can’t handle his money matters, how can he be trusted with a company?) and his capability to organize things.

We can clearly see here that a credit score is more than just a 3-digit set of number. It is a determiner in one’s personality and a basis of future transactions whether with employers or with credit companies. Early on, it is but advisable to keep a clean record and even if at present, you are not in need of any kind of loan. There will always be a time you will need one and all you can rely on is a good credit score.

You have probably heard the term ‘credit score’, but are you aware there are two major types? Here we will review the major differences between the FICO Beacon score and the Vantage score. Understanding how these work will improve your chances of building a solid history of paying on time.

The typical FICO rating will . . . → Read More: Fico Beacon Score Vs Vantage Credit Score]]>

FICO VantageScore

You have probably heard the term ‘credit score’, but are you aware there are two major types? Here we will review the major differences between the FICO Beacon score and the Vantage score. Understanding how these work will improve your chances of building a solid history of paying on time.

The typical FICO rating will range from 300-850, with 850 being excellent rating. Typically, a measurement of 620 is the dividing line between prime credit (lower interest rates) and sub-prime (much higher rates). With this in mind it is easy to see how maintaining as high a measurment score can save you a considerable amount of money in the long run.

To determine the differences between a FICO score and a Vantage let us look at how the FICO score is calculated. Typically it is calculated as follows:

• 35% based on payment history. More weight is applied to recent payments as compared to past payments.
• 30% based upon the amount of debt you are carrying.
• 15% based upon length of payment history. The longer the better.
• 10% based upon recent inquiries. The fewer the better.
• 10% based upon your credit mix. The more diversified (mortgage, car loan, cards, etc) the better.

The Vantage  was developed by the three major credit-reporting agencies as a better representation of one’s creditworthiness. While the FICO score remains the most popular, the Vantage is catching on. These scores runs on a scale of 501-990 and issues a letter grade to the measurment. Let us look at the components of the Vantage to see how it differs from the FICO.

• 32% based upon payment history. Similar weighting as FICO.
• 23% based upon total credit available.
• 15% based upon the portion of your score contributed by your outstanding balances.
• 13% based upon the kinds of credit held and how long you have held them.
• 10% based upon the number of recently opened accounts and number of recent queries.
• 7% based upon the total dollar amounts you could potentially use.

The FICO Beacon score was once synonymous with the term ‘credit score’, but the Vantage score seems to be gaining ground. As shown above there are differences between how the FICO score and the Vantage score are calculated. Understanding how each score is calculated can help you make better credit decisions to maintain an excellent credit rating