The credit reporting agencies have announced a new credit scoring service, VantageScore to measure the credit worthiness of a borrower. Anyone applying for a mortgage in the next few months will need to pay attention to the changes that are coming.
Equifax Inc. (EFX.N: Quote, Profile, Research), Experian and TransUnion LLC, a unit of Britain’s GUS Plc (GUS.L: Quote, Profile, Research), in a statement said they adopted the “VantageScore” in response to “market demand for a more consistent and objective approach to credit scoring.”
In the past, the agencies used their own formulas to gauge credit-worthiness. This created the possibility of widely varying scores, which could complicate consumers’ ability to obtain credit cards, auto loans, mortgages or other financing.
Many lenders now use “FICO” scores, named for Fair Isaac Corp. (FIC.N: Quote, Profile, Research), which developed software used to generate them.
The VantageScores will range from 501 to 990, compared with the current 350 to 850 range. Higher scores will still indicate greater levels of credit-worthiness, possibly leading to lower interest rates and better borrowing terms. via Reuters.com
VantageScore Official Web Site
Other Bloggers Covering VantageScore:
No related posts.
{ 4 comments… read them below or add one }
"Higher scores will still indicate greater levels of credit-worthiness, possibly leading to lower interest rates and better borrowing terms."
Oh bull. This means that the secondary market is demanding higher risk premiums and it is necessary to obscure the radical upside lending changes by using a new number.
Check out this post on the VantageScore from a former FICO insider. Wild! http://www.creditbloggers.com/2006/03/vantagescor…
I just don't understand why they (mortgage brokers) are making it harder to get a home loan. "They" were the ones financing people that could not qualify with ARM loans. I don't think it is all "their" fault, but it is mostly "their" fault. Just my opinion.
I really feel that the credit business is a scam. We as consumers are always trying to hit a moving target. Credit issuing companies can even craft their own credit rating criteria from the CRA's. This is an important factor when buying a home. I am waiting for that state attorney generals to set in and start to clean this mess up.
Jeffrey
IonHomeInspection.com
Houston, Katy, Sugar Land