I dont see a problem with the current method
How is this supposed to really effect your scores historically? Will it improve/reduce them? How long before this effects boat lending rates?
Major Credit Agencies Adopt Uniform Score
Tuesday March 14, 9:43 am ET
By Eileen Alt Powell, AP Business Writer
Three Large Credit Agencies Adopt Uniform Credit Score to Simplify Loan Process
NEW YORK (AP) -- The three major consumer credit reporting agencies announced Tuesday that they have created a new credit scoring system aimed at simplifying the loan process for both lenders and borrowers.
The announcement by Equifax, Experian and TransUnion said the new "VantageScore" was "a direct result of market demand for a more consistent and objective approach to credit scoring."
The agencies in the past each used their own proprietary formulas to create their own scores, meaning that a lender dealing with a consumer's application for a credit card or a mortgage might have to reconcile three widely different scores.
With the new system, a single methodology will be used to create the scores.
"Under the new scoring system, credit score variance between credit reporting companies will be attributed to data differences within each of the three consumer credit files and not to the structure of the scoring model or data interpretation," the agencies said in a joint statement.
It added that VantageScore "will provide consumers and businesses with a highly predictive, consistent score that is easy to understand and apply."
Credit scores are important because they measure how much debt a consumer is carrying and how well the consumer keeps up with bills.
The higher the score, the more creditworthy the consumer is considered and the lower the interest rate the consumer is likely to be charged.
The three credit agencies termed the move to a unified score as "unprecedented."
The scores will range from 501 to 990. The top end is slightly higher than scores currently in use.
In a separate statement, Experian said the new scores will be grouped on "the familiar academic scale." Experian gave these groupings:
A -- 901-990
B -- 801-900
C -- 701-800
D -- 601-700
F -- 501-600
Experian said it was hoped that "as consumers increase their awareness of the importance of credit scores and credit reporting, the consistency of VantageScore will provide the type of information they need to evaluate their credit standing and make sound financial decisions."
Kerry Williams, group president of Experian's Credit Services, said in the statement that the new approach "is a further progression of our efforts to satisfy client and consumer needs."
VantageScore is being independently marketed and sold separately through each of the three national credit reporting companies via licensing agreements with VantageScore Solutions LLC, the joint announcement said.
It said the new scores would be available immediately.
The credit reporting agencies are operated by Equifax Inc. of Atlanta, Experian Information Solutions Inc. of Costa Mesa, Calif., and TransUnion LLC of Chicago.
I dont see a problem with the current method
The only problem I saw was that the three big credit reporters used different methods and usually showed differing results. If nothing else, at least this should standardize them a little, for consistency's sake.Originally Posted by woody1
You still won't have the same score from all 3 a lot of times because not all leders report to all 3 and if you inquire into someones credit you may not pull a report for all 3 so your inquiry will not be figured into the score of the other 2.
On the other hand the model is standardized so all other things being equal it wouldn't matter who you pulled a report from.
I am a mortgage broker and have seen no change whatsoever yet... I do not think they can implement the new scoring "overnight" due to all of the mortgage lenders having their ENTIRE rate and risk classification based on the old system. We shall see. What I HAVE BEEN seeing is that the poor credit "folks" are getting breaks, and getting very competitive rates as if they had good credit. Average score I see daily is in the low 600's, right now 720 is A+.
Originally Posted by damdonzi
From thier website. So there will be new style and old style credit scores?
Q. What does this mean for the continued existence of the credit scores the three companies have developed and marketed individually for the past few years? Will these scores continue to be sold?
A. This score provides a new and unique option to the marketplace. There will continue to be multiple scoring solutions in the market that meet business needs. VantageScore will compete on the merits of its consistent, predictive power.
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