Have you heard of a Vantagescore?

by | Aug 17, 2019

What is a Vantagescore?

VantageScore is a credit score derived from all three major credit bureaus. The score predicts your likeliness to repay borrowed money. Lenders, financial institutions, and landlords all use these to judge how creditworthy you are.

Credit Bureau’s Experian, Equifax, and Tranunion produced this model to compete directly with the previous model FICO score. The current Vantagescore ranges anywhere from 300 to 850 similar to that of FICO. Vantagescore recently updated their scores from 501 to 990 to provide side-by-side comparisons to show both scores. The makers of Vantagescore believe in order for lenders to have an accurate assessment of your credit profile scoring systems must constantly be updated. These updates ensure that scores reflect changes in economy and borrower’s behavior. While Vantagescores present as a better option for consumers most lenders still prefer the FICO scoring model.

While FICO looks to judge your overall creditworthiness excluding any external factors. Vantagescore looks to challenge that by providing leniency to consumers experiencing unforeseen or extreme circumstances. Still judging consumers on payment history, age of credit, type of credit, credit utilization, reported balances, and credit behavior they choose to not focus on weighting each factor. Considering every consumer has a different credit profile. Each metric effects each consumer differently, thus focusing on FICO’s metric weighting model can be deceiving.  

 

Vantagescore 4.0

Vantagescore’s are prominent among consumers because of the wide range of factors that contribute to credit scores. They’re able to produce a score within a month or two of just opening an account.  Vantagescore 4.0 has the ability to score individuals with less than six months credit history. While FICO scoring model takes up to six months. Vantagescore takes into account recurring payments like rent, utilities, and phone bills which adds up to the lack of credit. Vantagescore’s goal was to enable lenders to find more creditworthy consumers and allow more consumers to access credit from mainstream lenders.

  • Unlike FICO, Vantagescore ignores paid collections accounts. It typically takes seven years for a collection account to fall off your credit profile. However, Vantage ignores these paid accounts in their calculations. FICO 9 does take this in to account although it is not as widely used.
  • Vantagescore focuses on “trended credit data”. Trended credit data takes into account changes in credit behavior over time. This can be especially helpful for those who’ve had a terrible start with credit but is now taking the necessary steps to make better financial decisions.
  • In the 4.0 model, Vantagescore uses Machine Learning technologies to develop scores for dormant credit profiles. Machine learning pulls data from individual credit profiles that has been dormant over the last six months.

 

Ways to Improve your Vantagescore

 

  • Make on time bill payments. This is the greatest influence on your credit score.
  • Only apply for credit when you need it. Opening too many accounts at one time reflects negatively on your credit
  • Keep your balances low. The 30% rule applies here. Never use more than 30% of your available credit at one time.
  • Minimize your overall debt. Too much debt reflects badly. Pay down some of your outstanding debt.
  • Build a good credit mix. Having a good mix of different credit types helps build up your score.

Where to obtain your Vantagescore?

To obtain your Vantagescore visit either Experian & TransUnion websites.

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