The vantage scores are a joint venture backed by the 3 credit reporting agencies (CRA’s). The score was created in 2006 by a 3rd party group that was handpicked and funded by the CRA’s. Even though they are supposed to be separate from the CRA’s they are still funded by them. It makes you wonder if this score becomes popular, is it going to give the CRA’s too much power? The vantage score is a bit more complex than the Fico scores. It uses current economic trends to evaluate it’s scores. It breaks down different types of revolving credit and puts them in various categories.
For example: instead of having overdraft on a checking account, home equity loans, and credit cards lumped into the same group (revolving credit) each one is viewed separately. This, they claim, will help to define the algorithms of the score in a more accurate light. If you are looking at a Fico score, to date, each of these categories mentioned are considered revolving credit. Revolving credit weights more heavily on the scores since it is the only credit you can charge the maximum and pay the minimum. This type of credit affects the score more since it is the credit we as consumers manage the most. It gives the score a more detailed view of our ability to control and use our credit. Vantage, instead of grouping it all together, separates each type and views it individually. For example: if you have high home equity balances but your credit card debt is low the score would reflect the difference where as the fico score would drop if any or all of your revolving credit balances were high. This is one of the differences in the score.
Some other distinctions of difference are authorized credit card holders. If you are not the primary on a credit card it will not be considered in the tabulation of your vantage score. This could be a good and bad thing. If you have very little credit and you need your score to increase if you are put on a relative or close friend’s credit card as an authorized user this could dramatically increase or decrease your Fico score. Depending on the length of this credit and past paying patterns will define the affect on the score. For example: if I had one car lease, 2 credit cards opened in the past year, and one student loan with a late payment from 2 years ago my score might be around a 602. If I was added on to my husband’s 10-year-old Amex (with great paying patterns and low balance) my score could increase up to 60 points or more. If the same thing happened on the vantage score it would not make a difference at all. The score would view the authorized account as invisible. The score also claims to be able to have less disparity between the 3 CRA’s but does not explain clearly how that is possible. It seems there are some really good ideas and valuable attributes to this scoring systems but it will only be clear when it starts to be used by banks more consistently.
The vantage score runs between 501- 990 and has a letter grade rating from a-f. An a grade and a 990 score would be the best and lowest risk consumers.
Fico scores range from a 300-850 with a 300 being the lowest and worst score. Vantage scores will always be higher than Fico scores since the range is so different. This leads to more confusion for consumers.
Tracy founded North Shore Advisory, Inc. because she saw firsthand how much misinformation there was in the field of Credit. Her expertise, educational seminars, and individual consulting services have helped thousands of people and businesses conquer credit problems, reach great financial goals, and achieve the success they deserve. She works with professionals & consumers across the country, showing them and their clients how they can position themselves for the mortgage, business loan, and financing process to get the lowest rates and save money.
Tracy Becker has appeared on nationally broadcast television and radio programs, delivering her down-to-earth message to consumers across the country. She is a popular writer of educational articles for realtors and bankers and has authored two books on credit.
Article Source: http://EzineArticles.com/4865485
Imagine your wife opening up your credit card statement and finding a $159.00 charge listed for an online flower and gift shop. Your wife doesn’t remember receiving flowers or even gifts from you, in the last several months. So, Who got the $159.00 worth of gifts? Each time she called the number listed with the charge, she only gets voice mail for the gift shop. An online search didn’t produce much more information. All she knows at this point, is that it wasn’t her who received gifts, and you have a lot of hard questions to answer when you get home. Believe it or not, this will be only the beginning of your problems today.
Your credit card number is very valuable, and is highly prized by scamming thieves. Today, your credit card number isn’t worth just one good account; it could be worth many more useable numbers. In fact, cash is so “yesterday”. This breed of thieves wants the ID and credit card numbers in your wallet, far more than the $20.00 in cash you are carrying. These thieves work so diligently, that by the time you receive credit fraud alerts, or see mystery charges on your statement, your account number could have been leveraged into many other accounts, ripe for fraudulent pickings!
Ever meet someone who you would describe as having “too much time on their hands”? That thought may cross your mind once you hear what the modern day money thief does with your stolen account number. Through the sham companies these guys set up, they determine that a stolen credit card is good by making a small, seemingly innocent charge on your card. Then they use the first 8 or 12 good digits of your card number and start guessing the last four or 8 digits. Yes, they have no problem sitting there all day and guessing numbers. Believe it or not they can guess many good credit card numbers this way. You can find this entire story and how to protect yourself on BowmansMoneyCollege.com.
Mike Bowman
Bowman’s Money College
Article Source: http://EzineArticles.com/4870267