Written By:
Edward Jamison, Esq. - a
nationally recognized speaker on the subject of Credit Scoring and an Attorney
that specializes in credit law and the development of software for the credit
industry. View video clip of Ed’s
presentation at www.MillionDollarBrain.com
The next “big thing” in credit scoring is the one-score
system.
The three major credit bureaus have formed a new company
called “Vantage Score Solutions, LLC” that will
directly compete with Credit Scoring Giant “Fair Isaac”. This new credit score
will be called “Vantage Score”. The
main pitch being used by the credit bureaus is that this score will be similar
across all three bureaus and lessen the wide gap currently seen between the high
and low credit score when using Fair Isaac’s Classic credit scoring model,
currently the industry standard in the mortgage industry.
Vantage Score will be independently
marketed and sold separately through each of the three national credit-reporting
companies through licensing agreements with Vantage Score Solutions LLC.
Although Vantage Score Solutions LLC is equally owned by each of the three
credit bureaus, the Credit Bureaus want to keep the profit potential separate
to a degree by being able to market the score separately. Basically, the company that sells the most
“score pulls” will make the most money from the new score since each bureau
will charge a fee for each score and only have to pay the parent company
“Vantage” a portion of the fee they are charging the consumer or credit company
for pulling the score.
Vantage Score ratings will range
from 501 to 990. The top and low ends are slightly higher than the FICO scores
currently in use and will be grouped in “report card” format - with "A" being the best and F
being the worst. This grading system is
meant to make assessing a consumer’s credit worthiness less difficult than the
currently Fair Isaac’s Classic FICO model that ranges from 300 to 850. The grading system and corresponding range for
the new Vantage Score will be as follows:
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