vs. FICO credit score
I recently obtained my credit score, and unfortunately you can only
obtain the VantageScore from TransUnion and Experian. But when I
applied for a mortgage they used the old scoring systems. Isn't
this going to cause major issues for borrowers?
If you purchase your score
and do not have the option of seeing what the lenders will see this will cause
people to apply for credit they just won't get. My middle score with Vantage is
668 but with the old scoring system it is only 574. Of course I didn't know this
until I applied for a loan.
I am in the process of rebuilding my credit but I feel there is
a discrepancy in the awareness of your actual credit score. Can
you provide any suggestions as to determining what your score is
and how to obtain the classic scores?
Section 609(f) of the Fair Credit Reporting Act, reproduced below,
spells out that the score you get from the consumer reporting agencies
(credit bureaus) doesn't have to match the score used by the lender.
They're not unrelated, since what's in your credit
report is, in both cases, the information used to compute your credit
(f) Disclosure of Credit Scores
(1) In general. Upon the request of a consumer for a credit score,
a consumer reporting agency shall supply to the consumer a statement
indicating that the information and credit scoring model may be
different than the credit score that may be used by the lender,
and a notice which shall include --
(A) the current credit score of the consumer or the most recent
credit score of the consumer that was previously calculated by
the credit reporting agency for a purpose related to the extension
(B) the range of possible credit scores under the model used;
(C) all of the key factors that adversely affected the credit
score of the consumer in the model used, the total number of which
shall not exceed 4, subject to paragraph (9);
(D) the date on which the credit score was created; and
(E) the name of the person or entity that provided the credit
score or credit file upon which the credit score was created.
The consumer reporting agencies are glad to take your
money and the score you get will relate to the credit score that
the lender gets from them, but it isn't likely to be the exact same
number. Experian is, as you point out, now offering the VantageScore
on its Web site, versus the FICO score.
|VantageScore vs. FICO score
|The VantageScore is based on six variables,
versus the FICO score's five variables. Here's a comparison
of the two:
In my mind I relate these changes to the change in
the scoring of the Scholastic Aptitude Tests, or SATs. The information
is still relevant, but everyone is feeling his way around using
the new score in decision making.
The top VantageScore is 990, in contrast to the top FICO score of
850. You could multiply your VantageScore by 0.86 (850/990) to get
a rough approximation of your FICO score -- that worked like a charm
with your numbers. Or use Bankrate's free FICO
to get an idea of what your "FICO Classic" score is.
To ask a question of Dr. Don, go to the "Ask
the Experts" page and select one of these topics: "financing
a home," "saving & investing" or "money."