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Topics addressed on June 28, 2006:
Experian makes VantageScore available to consumers
Several months ago Experian announced the introduction to lenders of the new VantageScore, the first credit score produced cooperatively by the national credit reporting companies.
Now Experian is making the VantageScore available to consumers. Recently, Experian launched a new Web site, www.vantagescore.experian.com, where you can purchase your VantageScore and learn more about what it is, why it was introduced and how it works.
The VantageScore offers a number of advantages for both businesses and consumers over previous credit scoring systems. From the business perspective, it has proven to more precisely predict lending risk. As a result, lenders are able to safely approve more applications, particularly for people who have little credit history. This could be especially important for people trying to enter the credit mainstream, specifically for young people and new immigrant populations.
By working together, the national credit reporting companies were able to create a single scoring model, or formula, that is applied to each of their systems. By using exactly the same model, your VantageScore from each of the national credit reporting companies will be very consistent. Differences in the scores will be the result of differences in the information in the credit reports, not differences in the formulas used to calculate the scores, as with earlier credit scoring systems.
VantageScore also makes it easier for you to understand what the numbers mean. Its scale of 501 to 990 breaks into groupings that approximate the familiar academic grading scale of A, B, C, D and F.
Associating a familiar letter grade with the VantageScore number will give consumers an immediate understanding of where their creditworthiness stands. A VantageScore report goes beyond a simple number or letter grade, providing a thorough explanation of what from your credit history most affected your VantageScore.
With that knowledge, you will be able to take action over time to improve not only your VantageScore, but all credit scores as your credit management gets better.
Thanks for reading.
- The "Ask Experian" team