Provides information and tips on the new credit scoring system which will be used by creditors and the three major credit bureaus in addition to the FICO score currently used.
Are the credit score ranges the same for VantageScore and my FICO score? No. The VantageScore will have a range from 501-990. For instance, a score of 901-990 is an A; 801-900 is a B; and 501-600 is considered an F.
The FICO credit scoring system has a range from 300-850. It appears that the VantageScore system may be tougher than the current FICO score. For example, if you have a FICO score of 720 you could get a 9% interest rate on a credit card you may have applied for. With the VantageScore, your interest rate for this same credit card may be as high as 20%!
The VantageScore became effective for commercial use on March 14, 2006. Time will tell, how effective this system will be for creditors and consumers. It appears that the new scoring system may be more advantageous to the creditors rather than the consumer, since the VantageScore ranges are much higher to qualify for a good interest rate. This would appear to allow creditors the ability to charge consumers more for products and services purchased.
As a consumer, make sure you become informed about the new VantageScore system and how it will affect you! Although the FICO scoring system can be still used by your creditor, they have an opportunity to choose which system they will review for your credit. Now there are two systems currently. How long the FICO scoring system will be around is anyone’’s best guess!