Vantage Score

Submitted by Anonymous (not verified) on Thu, 05/15/2008 - 00:10

To determine the creditworthiness of an individual, lenders have to depend on credit scores provided by the three major credit bureaus. This is generated on the basis of the algorithm developed by Fair Issac and Companies (hence the name FICO Score). But it has been often noticed that there exists a distinct deviation in an individuals credit report as each of the three bureaus use a slightly different formulae while calculating the score. Hence borrowers and lenders tend to question the accuracy and effectiveness of the scoring algorithm when discrepancies between the bureaus are large. VantageScore is an attempt by the three bureaus to reduce this difference by a larger extent as all of them will use a similar formula while computing. Hence credit score is expected to be more consistent with the introduction of VantageScore.

VantageScore will use the same data used to calculate the FICO score like the interval of paying of bills, amount of outstanding debt, etc. Unlike FICO score which ranges approximately between 300 to 850, VantageScore will have a scoring range of 501 to 990. It will also assign a letter grade depending upon the consumers credit score:

Score range Grade
901-990 A
801-900 B
701-800 C
601-700 D
501-600 F

The higher the score the higher the creditworthiness. On the other hand lower the score, higher the probability of the consumer defaulting in a financial transaction. The scoring criteria used will be the same across all three national credit bureaus. Moreover it can be available online. It is expected to be available to consumers later in 2006.

I am not sure what a vantage score is, have never heard of it before.

Thu, 05/15/2008 - 01:28 Permalink

Hi msburton-welch

Vantage Score is new credit score model prepared by the three major CRAs (Equifax, Experian and TransUnion ) to provide a consistent and predictive score for more people. This score will for the first time provide a consistent algorithm across the three CRAs and will be based on a 24-month review of a consumer's credit file. This Score uses the numerical range of 501 to 990 to represent the credit score of the borrowers, - higher score representing lower likelihood of risk and hence more creditworthiness.

Thu, 05/15/2008 - 06:56 Permalink

Hi msburton-welch

The major respect in which vantage score differs from FICO score is that Vantage Score is based on six variables (payment history, utilization, balances, depth of credit, recent credit and available credit) while FICO score is based on five variables (payment history, length of credit history, amounts owed, types of credit uses, and new credit). Moreover Vantage score offers a highly predictive and consistent interpretation of consumer's credit files across the three CRA's. According to Vantage Score, a score of 901 to 990 is an "A" grade score, 801 to 900 is a "B" grade score, 701 to 800 is a "C" grade score, 601 to 700 is a "D" grade score and finally a score of 501 to 600 is an "F” grade score.

Thu, 05/15/2008 - 07:14 Permalink

Ya know...that doesn't seem 'fair' ( and I know ALOT of credit scoring isn't). You can have the most WONDERFUL people, seperated, divorced, windowed, etc. and falling behind in bills...trying to deal with them, like everyone else. A piece of paper ( or a 'Score' in this matter, is SUPPOSELY telling somone what kind of person you are?

Thu, 05/15/2008 - 10:40 Permalink

If credit reports/scoring are not fair, perhaps you can come up with a way to lend money to people that doesn't take into account a person's race, gender, age (because these are prohibited by law). Test it by loaning out all of your money...if it works, you should end up quite wealthy in a few years. If it doesn't, well, at least you were fair, right?

Fri, 05/16/2008 - 14:00 Permalink

You have to understand that companys can't afford to take chances on peoples credit anymore than you can take a chance on the really friendly looking hitchhicker carrying an ax..... As flawed as the credit system is we NEED it. Look at what all of those Sub prime loans did to out economy. Not that the banks gave the loans to these ppl to be fair but, they did give big loans to ppl who had poor credit and well, the rest is history.

Sat, 05/17/2008 - 10:43 Permalink

Yea............this is understandable. Banks and Credit Unions take chances. If the person can't pay it back OR just fails to sends anymore payments, well.........i guess 'you' can do so much. THAT just means you wouldn't want to take a chance on 'these' people anymore ( speaking with 'personal experience', too) If I loaned someone money, and they din't pay me back and I din't hear from them in a long time, i would be 'cautious', too. And, no,.....I DON'T think i would loan money to a " hitchhiker with an ax." LOL.......even if he DID have PERFECT credit. LOL

Sat, 05/17/2008 - 23:30 Permalink

All good points but I think that credit reports save us all in the long run. If they just lent to anyone and people didn't pay..we would all pay for it in the end with higher prices and interest rates. I know life puts good people in bad situations but eventually the good people work it all out and get back on track. Whoever said life was easy?

Sun, 05/18/2008 - 23:45 Permalink

I do agree with fireyone. Credit reports give us a view of the borrowers credit history which shows how much the person is eligible for the loan and his capability of repaying the loan. If lenders lend money to anybody even to people who are not capable of repaying, the economy would end up with high inflation rates. So I think that lending should always be made after taking into account the person's credit report.

Mon, 05/19/2008 - 05:35 Permalink

LOL, I was refering to giving the hitchhiker with an ax a ride.....I'm pretty sure if I gave him money I'd consider it a robbery! ANyway, one thing I do dislike about the credit system is the way my car insurance company whom I have had for 8 years and never had a ticket or accident can raise my rates b/c I had a bump in my credit as a teenager! What does that have to do with my driving!

Mon, 05/19/2008 - 06:02 Permalink

WHAT!! REALLY?? Your car insurance went up because of your credit? WOW!! Do car insurance companies check your credit? I thought they just checked your driving record. That's news to me. car insurance actually went down, again. I have Nationwide.

Thu, 05/22/2008 - 02:43 Permalink

Yeah, thats why they cant give you a proper quote without your SS#

Thu, 05/22/2008 - 08:19 Permalink

It is really sad if the insurance companies pull up the credit report to determine car insurance rates. I too don't find any reason of linking insurance rates with credit report. These two are totally different issues altogether.

Thu, 05/22/2008 - 10:17 Permalink

When I got married and went to start my own Allstate policy after being on one with my father for 6 years with no accidents or late payments. They told me that my rates would triple and I would have to give a downpayment. When I asked why I was told that my husband and I were considered a high risk b/c of our combined credit score. I called every large company and was told they do the same thing.

Thu, 05/22/2008 - 21:15 Permalink

It is true that credit history affect the insurance premiums. I think they consider that higher is our credit score, the better driver we are and so lower is the premium. But like Carol, I too cannot find any relationship between the two.

Fri, 05/23/2008 - 07:35 Permalink

I think that the companies link insurance rates with credit history to see whether the person can meet the insurance premium timely or not. If his credit history is good, the companies become sure that the person will be able to continue the insurance premiums and hence charge lower premium rates. On the other hand higher premiums are charged to people with bad credit history only to avoid the risk associated with it.

Fri, 05/23/2008 - 07:52 Permalink

The woman I spoke to from Allstate said that generally they feel ppl with higher credit are more responcible.

Sat, 05/24/2008 - 05:13 Permalink

Yes, actually people have high credit score and a good credit history only when they repay the debt on time. This is in turn reflected on the credit report. So the insurance companies feel that the people who have high credit score are more responsible and charge low premium rates from them.

Fri, 06/13/2008 - 07:31 Permalink
matzcrorkz (not verified)

i9fYft A big thank you for your post.Thanks Again. Want more.

Wed, 08/06/2014 - 03:41 Permalink
cy bassin (not verified)

Please assign a grade letter to a vantage 3 score that tops out at 850 like fico, instead of your grade letter that tops out for vantage 3 at 990 that you show above.

Newer vantage 3 score tops out at 850 but i can't remember the assigned grade letters.
Thank you,

Cy Bassin.

Sun, 07/03/2016 - 11:18 Permalink