The ‘big 3’ reporting agencies maintain files on roughly 90 percent of all American adults
Brooklyn, NY (PRWEB) March 15, 2006
Surprisingly good news for consumers were announced by the three major consumer credit reporting bureaus. A unified VantageScore(SM) credit score is being introduced to replace the currently confusing field of multiple credit scores offered by the three competing credit bureaus.
Currently, each credit bureau uses a proprietary credit score to rate credit worthiness of each consumer. Creditors use credit scores derived from credit reports to grant or deny credit, including credit cards, loans and mortgages.
Different creditors use credit scores from Equifax, Experian, TransUnion or FairIsaac. Fair Isaacs produces the best known credit score, known as the FICO™ credit score. Because of the differences in formulas used by competing credit agencies, the same consumer can have either good or bad credit score depending on who does the scoring. This variability in credit score-based credit worthiness creates nightmares for thousands of unlucky credit seekers who score badly with one of the credit bureaus despite having a good credit history.
Credit-Score.org, the authoritative guide to consumer credit scoring, introduced a news section devoted to the new VantageScore (SM) credit score. It helps consumers understand the Vantage Score (SM) credit score and to transition from the current system.
“Introduction of a simplified and unified Vantage Score credit score is a victory for consumers and creditors alike, who until now had to grapple with confusing and often contradictory credit scoring algorithms,” said credit score expert and editor of Credit Score Online Information Center, David Caro.
Under the new scoring system, credit score differences between credit reporting companies, Equifax, Experian and TransUnion will be attributed to data differences within each of the three consumer credit files. Credit score will no longer vary due to the variation in the credit scoring algorithm model since the same formula will be used by all credit bureau.
VantageScore will offer consumers and businesses a highly predictive, and uniformly consistent credit score that is easy to understand and apply. VantageScore uses score ranges from 501 to 990.
According to credit-score.org, a credit score of 501 is equivalent to the lowest possible credit score that signifies significant credit risk. A consumer with a lower credit score is expected to have difficulty obtaining credit and will pay higher interest rates.
A score of 990 signifies excellent creditworthiness. A consumer with an excellent credit score is expected to benefit from the lowest possible interest rates and ease of obtaining credit from creditors.
VantageScore credit score is derived from consumer credit reports managed by Equifax, Experian and TransUnion. According to Steve Brown, a credit consultant from Denver, Colo., accuracy is a big problem when it comes to credit reports. “The ‘big 3’ reporting agencies maintain files on roughly 90 percent of all American adults,” says Brown.
“What’s scary are the estimates that roughly eight in 10 reports have serious errors or other mistakes of some type.” He cautions that it is ultimately up to the consumer to make certain the reporting agencies get their information right.
Keeping a constant watch on your credit report and your credit score can be simplified with continuous credit monitoring services. http://www.free-credit-reports.com is a consumer advocacy resource recognized for continuous monitoring of special offers from the credit bureaus. Consumers will find reviews of free credit report offers from Equifax, Experian and TransUnion. Free credit score and report offers are also reviewed and updated monthly.
About Credit Score Information Center
Credit Score Information Center is a well respected consumer resource on consumer credit scoring. It helps consumers understand what credit score is, how credit score is used and how to improve credit.
For more information, visit the company's Web site at http://www.credit-score.org