[2008] ?? RE FICO and VantageScore

[caribbean]

I was checking my credit reports & scores last evening. Apparently there is some new scoring system called VantageScore. The scale is different from the old FICO system. No way to compare since it is apples vs oranges. Are there any Tuggers in the business who can explain why the new system exists? Which score are bankers making car loans & mortgages using? Which system should I be tracking as I attempt to get my scores up higher? Do I need to be payinhg to check both?

Thanks,

 

[JudyS]

...Apparently there is some new scoring system called VantageScore. The scale is different from the old FICO system. No way to compare since it is apples vs oranges. Are there any Tuggers in the business who can explain why the new system exists?...

I'm not in the credit reporting business, but I'd assume that VantageScore exists because the bureau offering it doesn't have the licensing necessary to offer real FICO scores, and they want to have some score to sell you instead.

This VantageScore sounds like what is known as a FAKO -- a fake FICO score sold by a competing credit bureau. (Only one credit reporting agency is licensed to sell real FICOs to the general public; I think it's Equifax.)

As for what the lenders use, most of them use their own proprietary methods. However, the real FICO is usually considered the most informative of the scores sold to the public.

 

[caribbean]

Actually VantageScore was developed by Experian, Equifax, and TransUnion. Seems that they have dropped FICO. Would like to know which systems lenders are really using.

 

[Wonka]

This is what I found online:

"FICO and VantageScore use two different ranges. The classic FICO scale runs from 300 to 850, while the VantageScore starts at 501 and runs to 990. The bureaus say the VantageScore range is more "intuitive," because it breaks down like an elementary-school report card:

* 901-990 equals "A" credit

* 801-900 equals "B" credit

* 701-800 equals "C" credit

* 601-700 equals "D" credit

* 501-600 equals "F" credit

But nothing is really intuitive about credit scores, particularly for consumers who are already confused about how FICO scores work. At worst, there could be a heck of a lot of puzzled borrowers trying to figure out why a number that would qualify them for the best rates and terms under one system (say, a 780) makes them credit mediocrities under the other.
The 'consistency' rap"

 

[DG001]

If you check your free annual credit report thru one of the three agencies, they try to upsell you - "Get your credit score for only $5 more" - but what they don't tell you is that its the pretty useless Vantage score they are selling.

If you want to see your "real" FICO score (the one most lending institutions use), the place to get it is at myfico.com, (which is owned by Fair Issacs). They charge $$$ and also have a free user forum. They also license out this product to other "monitoring" services like truecreditreport.com etc.

Nope - I am not from the industry. I just think everyone should know that you have a right to check your credit report FOR FREE (might depend on state) three times a year - one from each of the credit agency.

I also think there is more than a slight conflict of interest in these agencies charging 'us' for 'our' personal information, but thats another story... (and maybe thats just me)

 

[benyu2010]

credit score is only one of major factors taken into consideration by lender for large ticket purchase. Debt ratio, income level, employment history, residence status and net worth are all big parts for the decision. Unless your credit score has major ding, it does not matter much in many cases.

 

[Janann]

As for what the lenders use, most of them use their own proprietary methods.

Mostly not true. Huge lenders like Bank of America use their own methods. Smaller lenders buy one of a handful of software programs that will run the numbers for them, or they use their own manual method.

credit score is only one of major factors taken into consideration by lender for large ticket purchase. Debt ratio, income level, employment history, residence status and net worth are all big parts for the decision. Unless your credit score has major ding, it does not matter much in many cases.

That depends on what you mean by a large ticket purchase. When I spent a few thousand dollars recently at Sears, only my credit score was reviewed. For a house, other factors that you listed will definitely reviewed. But then your score becomes a factor on how the loan is priced, so your score could be low and you will still qualify for the loan, but you will pay more for the loan.

As I always say, you can always find someone to lend you money, but there will be a huge pricing difference depending on your credit score.

 

[DeniseM]

Please note that this thread is from 2008, and it was brought out of mothballs by a spammer between posts 5 & 6 - that post has been deleted.