Revamped VantageScore - What do you need to know about it?
The revamped version of VantageScore has arrived. The much talked about VantageScore 3.0 is the modified version of original credit score model. VantageScore was introduced in the country by the leading credit reporting agencies of the nation – Experian, TransUnion and Equifax in the year 2006.
Some interesting changes have been made in the new and improved version of the VantageScore. If you’re genuinely interested to know about them, then go through the article.
Changes that have taken place in VantageScore
Check out some intriguing changes that have taken place in the VantageScore to manage your credit life in a better way.
1. VantageScore won't count negative history if you've been affected by natural disasters
After millions of consumers suffered severe problems due to the onslaught of recent natural disasters like Hurricane Sandy, several traditional financial institutions have decided to not charge fees temporarily. It seems that VantageScore has taken a cue from them. The modern version of VantageScore may overlook any negative account activity that actually happened during a natural disaster.
2. The credit score range will be like that of FICO
In the earlier version, VantageScore ranged from 501 to 990. Consumers used to get confused a lot of time since the FICO's scale was something different. The FICO credit score ranges from 300 to 850. The revamped VantageScore will have the same range from now onwards. This will be convenient for both the consumers and lenders.
3. Your paid off debt collection accounts will not be used to calculate score
Have you paid off a debt collection account? If yes, then there's a fantastic news for you. Vantage credit scoring model won't take your paid off collection account into consideration while computing your score. Usually, when you pay off a collection account, even in full, that account is not removed from your credit report. The negative account will be still there on your credit report. FICO will use this account while calculating your credit score.
VantageScore will not include your paid off collection account into the calculation. This will be a blessing in disguise for you, especially when you’re trying to improve credit score.
4. More consumers will be able to have a credit score
Around 30 million consumers were unable to qualify for a FICO credit score due to insufficient credit history. However, thanks to VantageScore, now these consumers will be eligible for a credit score. The new credit scoring model will analyze your credit activities in the last 1 year and give you a score based upon that. Even if your credit history is as less as 6 months, then also you can qualify for a credit score.
Only time will tell if all the main lenders and credit card companies will use VantageScore in future. At present, only 7 of the leading financial institutions, 6 of the major credit card companies, 4 of the main auto lenders, 4 of the leading mortgage companies use VantageScore at the moment. It has to be seen if more and more lenders use VantageScore in future.
It is expected that VantageScore will come up with more changes in the next few months. It would be interesting to see if FICO credit scoring model also comes up with certain changes to give a tough competition to the VantageScore.