The Quiet War on Credit Scores - FICO Vs Vantage Vs You
Once upon a time there was a giant (Fair Isaac Corp.
- also known as FICO).
This giant dominated the credit-score industry.
It provided the scoring system to the three credit bureaus (Equifax, TransUnion & Experian) for a fee.
Since FICO was the only game in town, it could demand pretty much what it wanted for a fee.
The three credit bureaus collected data on all of us who used credit, applied the FICO formula to the data to obtain a credit score and sold this information to lenders.
Secrecy was the order of the day - you and I were kept in the dark.
The giant decided that if we knew how they kept score, we would try to rig the score to our advantage.
Nah, never.
The Government decided we should get a copy of our credit report when we were turned down for credit and once a year.
Hooray! The hoorays died down a bit when we found out that our free annual credit report did not include a score.
That took much of the fun out it.
The credit bureaus saw an opportunity in all this.
They started selling scores to us.
This was a new market for them and we are talking about a lot of money.
The giant, FICO, took what he considered to be his share - not a small portion either.
The credit bureaus did not like sharing.
What to do.
Equifax, TransUnion & Experian got together to talk about this problem.
They decided to create their own credit scoring system - they called it Vantage.
The giant was angry.
There was much pushing and shoving.
The bottom line is, for the time being, they still needed each other - the credit bureaus had our information and the giant had the formula the lenders preferred.
All out war was out of the question, but there was too much money at stake for peace either.
The Quiet War continues.
Vantage continues.
The better credit score is what the credit bureaus are selling.
Lenders are testing it.
Mainly Vantage is sold to the public.
It has a credit range of 501-990 - FICO's range is 300-850 so you can't really compare.
So, now with two systems it is even more difficult to have an idea what our credit score really is.
If you receive a Vantage score without knowing, you might think your credit is better than it is.
Equifax and TransUnion will still sell you FICO scores, Experian will not.
The Quiet War continues.
Who will win? Right now, we still use only FICO scores.
If you are in the market for a mortgage, your lender can probably provide you with all three of your FICO scores - we do.
- also known as FICO).
This giant dominated the credit-score industry.
It provided the scoring system to the three credit bureaus (Equifax, TransUnion & Experian) for a fee.
Since FICO was the only game in town, it could demand pretty much what it wanted for a fee.
The three credit bureaus collected data on all of us who used credit, applied the FICO formula to the data to obtain a credit score and sold this information to lenders.
Secrecy was the order of the day - you and I were kept in the dark.
The giant decided that if we knew how they kept score, we would try to rig the score to our advantage.
Nah, never.
The Government decided we should get a copy of our credit report when we were turned down for credit and once a year.
Hooray! The hoorays died down a bit when we found out that our free annual credit report did not include a score.
That took much of the fun out it.
The credit bureaus saw an opportunity in all this.
They started selling scores to us.
This was a new market for them and we are talking about a lot of money.
The giant, FICO, took what he considered to be his share - not a small portion either.
The credit bureaus did not like sharing.
What to do.
Equifax, TransUnion & Experian got together to talk about this problem.
They decided to create their own credit scoring system - they called it Vantage.
The giant was angry.
There was much pushing and shoving.
The bottom line is, for the time being, they still needed each other - the credit bureaus had our information and the giant had the formula the lenders preferred.
All out war was out of the question, but there was too much money at stake for peace either.
The Quiet War continues.
Vantage continues.
The better credit score is what the credit bureaus are selling.
Lenders are testing it.
Mainly Vantage is sold to the public.
It has a credit range of 501-990 - FICO's range is 300-850 so you can't really compare.
So, now with two systems it is even more difficult to have an idea what our credit score really is.
If you receive a Vantage score without knowing, you might think your credit is better than it is.
Equifax and TransUnion will still sell you FICO scores, Experian will not.
The Quiet War continues.
Who will win? Right now, we still use only FICO scores.
If you are in the market for a mortgage, your lender can probably provide you with all three of your FICO scores - we do.
