Posted on: 16th Mar, 2006 10:26 am
I was reading somewhere on the news headlines that a new scoring system has been developed. Is it true? Can I have some more details on it? Is there any advantage with the new system?
Hi Roland,
This is the most recent creation by the three major credit bureaus - Equifax, Experian and TransUnion. They are calling it as VantageScore and will be introduced to the banks, lenders and other financial institutions immediately.
This new credit scoring system has been developed to help the financial institutions in evaluating the loan applications easily. The consumers will also get a better way to know their financial condition.
The main intention behind the development of this new scoring system was to have a consistent scoring model which will work with all three reporting agencies' data. The consumers will have a consistent score to easily understand and use when required.
Consumers will get this new score available to them probably by later this year.
God bless you.
For MortgageFit,
Samantha
This is the most recent creation by the three major credit bureaus - Equifax, Experian and TransUnion. They are calling it as VantageScore and will be introduced to the banks, lenders and other financial institutions immediately.
This new credit scoring system has been developed to help the financial institutions in evaluating the loan applications easily. The consumers will also get a better way to know their financial condition.
The main intention behind the development of this new scoring system was to have a consistent scoring model which will work with all three reporting agencies' data. The consumers will have a consistent score to easily understand and use when required.
Consumers will get this new score available to them probably by later this year.
God bless you.
For MortgageFit,
Samantha
Hi Roland,
As the scores of the three bureaus vary, so the lender had to reconcile the three different scores while dealing with a loan application.
The new system is going to have a single methodology to create scores for all the three credit bureaus.
This will enable to have same score across all the three bureaus and any difference in the score will be due to the differences in data collected by each agency.
The new scoring system will be advantageous as it will be highly predictive, consistent and easy to understand.
James
As the scores of the three bureaus vary, so the lender had to reconcile the three different scores while dealing with a loan application.
The new system is going to have a single methodology to create scores for all the three credit bureaus.
This will enable to have same score across all the three bureaus and any difference in the score will be due to the differences in data collected by each agency.
The new scoring system will be advantageous as it will be highly predictive, consistent and easy to understand.
James
Thanks for the replies. Is there any range set for what you are calling VantageScore?
Roland,
The range for the VantageScore will be 501 to 990. The grades are likely to be as follows -
A - 901-990
B - 801-900
C - 701-800
D - 601-700
F - 501-600
Consumers with Grade A, is going to be considered as the best potential borrowers and Grade F as the weakest.
God bless you.
For MortgageFit,
Samantha
The range for the VantageScore will be 501 to 990. The grades are likely to be as follows -
A - 901-990
B - 801-900
C - 701-800
D - 601-700
F - 501-600
Consumers with Grade A, is going to be considered as the best potential borrowers and Grade F as the weakest.
God bless you.
For MortgageFit,
Samantha