Find Out How The New Vantage Score Will Affect You!
Learn how the new vantage score or vantagescore credit scoring system will affect you!
You may have heard about the new vantage system that is expected to change the face of consumer credit. Introduced by Equifax, Experian and TransUnion, the "big three" 3 major bureaus, vantage is expected to eventually replace the FICO score that is currently in place.
This new method of scoring is expected to simplify scoring for credit risks used to determine a consumer's interest rate.
The ultimate objective of the 3 major reporting bureaus is to have lenders such as banks card companies, auto dealers and mortgage lenders to cease the use of the FICO report and use the vantagescore instead.
The FICO score is currently the most widely used scoring method for consumers. It is based on a scoring system that addresses a low score of 300 to a high score of 850. However, this system is somewhat inconsistent and difficult to interpret.
The new vantagescore is easier to understand and will be consistent throughout all of the 3 major bureaus as well as the lenders. In other words, with vantage everyone will be on the same page and that will make the sharing of information among agencies much more efficient and far easier than in the past.
Prior to the implementation of this vantagescore scoring system, a person may receive a different FICO score from each agency.
This creates an unclear picture of the person's financial standing so the lender would typically select the number in the middle and use it. The vantage system will do away with all of that because all bureaus and lenders will use the exact same vantage system.
The credit bureaus will still use the consumer's file to generate scoring, but the vantage formula for the new score is different than FICO scoring. This new vantage system for obtaining a score could prove to be very efficient and helpful.
There are four strengths that the Vantage Score offers:
- It is consistent - The vantage scoring algorithm is the same for all three national reporting companies. This offers much greater consistency in getting an accurate score.
- It is accurate - Because the vantage data is well known the most accurate scoring model is easily achieved.
- It is innovative - Vantage has applications of statistical modeling techniques that are patent pending. This allows the vantage system to achieve an enhanced predictiveness and ensures that the consumers will get a score that more accurately reflects their behaviors, thus allowing them to be eligible for more appropriate financial terms.
- It is easy to understand and utilize - The scoring range runs from 501 to 990 and higher scores indicate a lower risk.
Vantage Score was Introduced by Equifax, Experian and TransUnion get your 3 credit bureau reports!
VantageScore promises greater consistency, accuracy and predictability for consumers and lenders alike. Its cutting edge, patent pending development methodologies allow a customer's worthiness to be ranked much more accurately that what is currently available.
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