VantageScore - New Credit Rating Score System

[jeffrey]

The big three credit reporting agencies (Equifax, Experian and TransUnion) have come up with a new scoring model that is uniform between the three companies. Up until now, each company had their own unique model for scoring an individual meaning that the scores were sometimes quite different. The new scoring system should be more consistent and objective than the three separate models each had before.

The new scoring system is called the "VantageScore" scoring system. If there are differences in the credit score for an individual, it is because the different reporting agencies may have differing data on the individual, but the way the data and interpreted is scored is consistent.




"VantageScore" has a range from 501 to 990 with scores of "A" (901 to 990) "B" (801 to 900) "C" (701 to 800) "D" (601 to 700) and "F" (501 to 600). For more information visit the Web sites of the three major credit bureaus. The score is currently only available to businesses, but will be available to individuals later this year.

It seems to me that this new scoring system will, over time, likely replace the individual scoring systems each of the credit reporting agencies currently has. From a business perspective, it makes more sense comparing the scores on a consistent criteria rather than various ones when the exact criteria aren't known in the first place.

It should also give consumers some good hints on exactly how the credit scores are scored. If you look at your three reports and two are the same and once has an extra piece of data, you will be able to determine exactly how much that extra piece of data is worth due to the difference in score. Up until now, any difference could have simply been from a different scoring methodology. My prediction is that in time this new service will enable everyone to know more accurately how different pieces of your credit report affect their credit score.

[katwoman]

I see problems.

Fine as far as a uniform scoring model, but the rest of it smacks of information sharing amoung the credit bureaus.

Companies pay a subscriber fee to report to credit bureaus. Not all want to pay all 3 of them so they pick and choose who they will report to. A bank I did business with would only report to TransUnion. This made sense since I live in the same city as TU's headquarters and it is well known that most creditors in the area will pull a TU report when granting credit. (I call it being in TU territory) Not too many creditors will pull from more than 2 credit bureaus. I highly doubt this is going to change.

This is also the reason I keep close watch on my TU report and score over the other two and am quick to dispute anything on it. My insurer (State Farm, also based in IL) checks my TU report (exclusively) which determines what my premiums will be.

So, if you have a uniform scoring model and a creditor that only subscribes (reports) to one or maybe even two of the credit reporting agencies....how is that going to even out your score? It can't. It shouldn't. Unless some kind of info sharing is going on.

[scfr]

Have any of you now had experience with the new Vantage Score, and if so, what do you think of it?

I just got my Vantage Score for the first time ever when checking my credit report & score. I have to say that the score itself and the reasons given for why it was lower than what it could be made perfect sense to me. Since I don't have a mortgage, since I recently closed one credit card account and opened 2 others, and since I don't keep very high credit limits on my cards, I knew my score was not going to be perfect. But low and behold, this Vantage Scoring system does seem to take in to account the fact that I have never been late on a credit card payment and so I got a "B" score. I can accept that.

Last time I checked my credit report & score (6 months ago ... yes, I know I really should do it every 4 months) I got my FICO score and found that my score had plummeted from "Excellent" to "Fair" and the reasons given were very murky but the best I could make out from the poorly written explanations and calls to the credit agency was that it was because I had recently paid off my mortgage, which of course is just ridiculous in my opinion! [Dropping it from Excellent to Good ... okay. But from Excellent to Fair? Come on!]

[poundwise]

The problem is that there are still three scores between the three major bureaus. Even though the formula is supposedly the same, the differences, almost always existent, between the information carried by them will result in different scores. So your VantageScore, as pulled from Equifax will differ from your VantageScore, as pulled from Experian.

For now, I hope that Fair Issac's FICO score continues to be the standard. Unfortunately, if the past is any indicator, that which is best or most accurate will not prevail over that which is more heavily marketed.