| Credit bureaus create alternative
to FICO |
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Different data, different scores
Fair Isaac explains on its Web site that the more expensive option
is better because "(e)ach of the three national bureaus may
have different data on you -- and you won't know it until you check."
It adds: "Since your credit reports may be different, your
FICO scores can also be different, sometimes by as much as 100 points."
In announcing the new credit-scoring model, representatives
for Equifax, Experian and TransUnion are careful not to denigrate
FICO scores and are reluctant to discuss Fair Isaac at all. But
they imply that VantageScore is better because it will do away with
those 100-point disparities.
Equifax's spokesman, David Rubinger: "Essentially, for an
individual's credit score, the only variance in the score will now
depend on what is the data in the file itself, as opposed to it
being a difference in the methodology in how the score is being
crafted."
Hey, that's how folks at credit bureaus talk.
Colleen Tunney, spokeswoman for TransUnion, touts VantageScore's
consistency. She acknowledges, though, that each credit bureau has
a different set of data for each consumer, so scores still will
vary. Just not as much as they do now.
Thin-file credit scores
The representatives tout VantageScore's ability to craft a usable
score based on a skimpy credit history.
Rubinger says VantageScore "will produce a greater
number of scores on what we call the 'thin-file population'"
-- people without much of a credit history. The thin-file population
includes young people, immigrants, recently released prison inmates,
and some divorced and widowed people.
A mortgage lender expresses skepticism that VantageScore will
take hold. "We will only change scores once our investors dictate
to us they would prefer we use a different score," he says.
"My guess is this new score will be slow to gain popularity,
if it ever does."
That's especially true, he says, if VantageScore
costs more. Increased costs would be passed along to consumers and
mortgage lenders who are squeezing dimes nowadays, competing ferociously
on costs.
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