Vantage Score

Posted on May 21, 2015 in Credit Score

Your Vantage Score is another type of credit score that is similar to your FICO score. Vantage Score was designed to simplify and enhance the credit process for both consumers and creditors. Many consumers find the FICO score system a bit confusing, which is one of the main reasons why the Vantage Score was created. Vantage Score is the collaboration of the three major credit reporting companies, Equifax, Experian, and TransUnion. These three companies worked together to develop a generic credit scoring model that is easy to understand for bother lenders and consumers.

Features of Vantage Score:

There are various features of Vantage Score that set it apart from the other credit scoring systems. Some of the better features include:

  • 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

Benefits of using Vantage Score:

Along with all of the enhanced features of Vantage Score comes a slew of benefits that are aimed to help consumers and lenders. A small list of the benefits of using Vantage Score is:

  • 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.

As you can see there are some great benefits to using the Vantage Score credit scoring system over other systems. Hopefully more and more lenders will move to the Vantage Score credit scoring system over the usual FICO system so that consumers and lenders can benefit from this new and improved rating system.

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