What's this new VantageScore credit score!
The three major credit bureaus Experian, Equifax and
TransUnion introduced the VantageScore in March 2006
to compete and replace the current FICO score system.
VantageScore has one big thing going for it: It's easy for
consumers to understand. VantageScore scores are on a
scale of 501 to 990. If your score is in the 900s, you have
the credit equivalent of an A and you'll get favorable
interest rates. If your score is in the 800s, that's the
credit equivalent of a B, with slightly less-favorable rates.
The credit bureaus say they've introduced this new
system so that the scores being reported to credit
grantors are consistent and easier to interpret.
But some observers say that the new scoring model
won't change the biggest problem consumers face when
it comes to credit scoring -- inaccurate or incomplete data
in their individual reports
To understand what that means, you need to know that
while we all get a score generated from each bureau,
how those scores are determined can vary greatly. That's
because each bureau uses a different formula to
generate the score it sells to lenders.
The scores under the new system could still cause a huge
spread in scores. Credit scores are generated using
information in your credit files. Each file can have all the
same information or vastly different data.
One creditor may or may not report all your information to
all three bureaus. Or one of your files might be missing
the maximum limit on your credit card, making it appear
as if you are overextended.
The new score was just introduced last week, and
adoption is gradually moving along. The credit bureaus
plan to replace the proprietary scores at their Web sites
with the VantageScore over the next few months, but
right now they're focusing on marketing the score to
lenders.
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For more details and a complete explanation of how the
score works and what to do to improve yours visit:
http://www.credit-repair-specialist.com and
http://www.debt-elimination-program-reviews.com for
the latest updates.
