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Vantage Score- What makes it
different from Fico?
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The Vantage Scores are a joint venture backed
by the 3 Credit Reporting Agencies (CRA's). The Score was created in
2006 by a 3rd party group that was handpicked and funded by the
CRA's. Even though they are supposed to be separate from the
CRA's they are still funded by them. It makes you wonder if
this score becomes popular, is it going to give the CRA's too much
power? The Vantage Score is a bit more complex than the Fico
Scores and uses current economic trends to evaluate the scores as
well. It breaks down different types of revolving credit and
puts them in various categories.
For example: instead of having overdraft on a checking
account, home equity loans, and credit cards lumped into the same
group (revolving credit) each one is viewed separately. This,
they claim, will help to define the algorithms of the score in a more
accurate light. If you are looking at a Fico Score,
to date, each of these categories mentioned are considered revolving
credit. Revolving credit weights more heavily on the scores
since it is the only credit you can charge the maximum and pay the
minimum. This type of credit affects the score more since it is
the credit we as consumers manage the most. It gives the score
a more detailed view of our ability to control and use our
credit. Vantage, instead of grouping it all together, separates
each type and views it individually. For example: if you
have high home equity balances but your credit card debt is low the
score would reflect the difference where as the Fico score would drop
if any or all of your revolving credit balances were high. This
is one of the differences in the score.
Some other distinctions of difference are authorized credit
card holders. If you are not the primary on a credit card it
will not be considered in the tabulation of your Vantage Score.
This could be a good and bad thing. If you have very little
credit and you need your score to increase if you are put on a
relative or close friend's credit card as an authorized user this
could dramatically increase or decrease your Fico Score.
Depending on the length of this credit and past paying patterns will
define the affect on the score. For example: If I had one
car lease, 2 credit cards opened in the past year, and one student
loan with a late payment from 2 years ago my score might be around a
602. If I was added on to my husband's 10-year-old Amex (with
great paying patterns and low balance) my score could increase up to
60 points or more. If the same thing happened on the Vantage
Score it would not make a difference at all. The score would
view the authorized account as invisible. The score also claims
to be able to have less disparity between the 3 CRA's but does not
explain clearly how that is possible. It seems there are some
really good ideas and valuable attributes to this scoring systems but
it will only be clear when it starts to be used by banks more
consistently. The score runs between 501- 990 and has a letter
grade rating from A-F. An A grade and a 990 score would be the
best and lowest risk consumers.
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Call
Now for a
Free
Credit Education Seminar!
914-524-8300
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"Great credit brings
great
opportunity!!"
Copyright 2010
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Call
Today for a Free Credit Education Seminar!
914-524-8300
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Do
you know all of the scoring systems available?
Do you know what a Plus Score is?
Do you have ALL the answers??
Call for your FREE Educational Seminar!
This training includes indepth education on each of the credit
reporting agencies and the scoring systems associated with them. We
will also educate your management staff on credit, the unknown dangers
of credit score reduction and the ways to help your clients have peace
of mind and get the credit they need.
Contact NSA Today!
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NEW!
Do
You Have Any Questions About Credit?
Ask Tracy!
ask@northshoreadvisory.com
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Featured Testimonial
May 26, 2010
Wow! after inviting Tracy
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she was easy to understand. She was articulate and poised and even
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Arnold Fleischer
Adelphi University, Program
Chairman
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