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Dr. Don Taylor, CFA, Bankrate.com advice columnistVantageScore vs. FICO credit score

Dear Dr. Don,
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.

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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?
-- Chantale

Dear Chantale,
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 score.

(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 of credit;
(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 score estimator 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."

Bankrate.com's corrections policy-- Posted: Nov. 17, 2006
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