What is the Vantagescore

If you haven’t heard about VantageScore you may perhaps receive a pleasant surprise when you pay for your credit score from one of the three major credit reporting bureaus. You could well receive a score much higher than you anticipated.  Experian, Exquifax and TransUnion joined forces to produce one generic credit scoring model which will reduce inconsistencies in scoring across the three bureaus. However each of the bureaus continues to also produce their own individual scores.

When the consumer pays for their credit score from any of the 3 main credit bureaus they won’t know which one they are being sold,one of their own or a Vantage one, which is why a score of 850, the top number on the Fico score, could lead to a false impression. VantageScore uses a different scoring range to Fico: Fico uses a score range of 300-850 whilst the VantageScore overlaps this and uses 501-999.

Thus a consumer receiving a VantageScore of 850 will most likely assume they have hit the Fico jackpot whilst in actuality their score is not from the top drawer. The VantageScore comes with a handy grade measure along with the number, and a score of 850 will earn the consumer a B. Only scores above 901 will be A rated.

Fico remains the credit score most widely used by lenders, whilst VantageScore is beginning to gain ground since its launch back in 2006. Vantage does offer competition to Fico but is only useful if the lender which the consumer applies to uses Vantage in their decisions. VantageScore is owned by Experian, Equaifax and TransUnion, names which all lenders know.

Vantage claims it gives greater access to credit for the currently underserved population which do not use credit. This is a huge untapped market of approximately one quarter of all Americans, and a market which lenders are keen to attract and turn into loyal customers. The scoring algorithm which Vantage uses provides predictive scores on consumers with limited credit histories. Consumer scores are primarily based on 24 month data held. This gives a much greater opportunity for those who have never held credit to become mainstream customers rather than being served primarily by sub prime lenders.

The use of another credit score which offers a different scoring pattern to Fico is likely to leave consumers confused, as they are so used to hearing of the importance of their Fico score. Currently the Fico score is accessed by employers and insurance companies, as well as banks and card issuers. Vantage is used by some lending institutions but Fico still retain market dominance and is the name everyone knows. If you need to pay for your credit score at the moment it would be safer to order your Fico score until Vantage has gained further market share, as there is only a small percentage of lenders using it.