The VantageScore Advantage

VantageScore reduces lending risk while encouraging more loan approvals. The VantageScore actually helps open the door to traditional credit for some people who previously were unable to qualify because they did not have enough credit history for other scores to evaluate. This is particularly important to young people and new immigrant populations.

VantageScore uses one scoring formula for all three credit reporting companies. The credit reporting companies worked together to develop one score that is used by all three of the national credit reporting companies. Previous credit scoring systems essentially created three credit scores – a different one for each credit reporting company.

The VantageScore formula was developed based on information obtained from a very large, randomly selected sample of credit reports from each credit reporting company. Those sample credit reports were obtained at exactly the same point in time. As a result, the components of the scoring formula are identical. Any score differences across the three credit reporting companies are due to differences in data on the credit report, not differences in the scoring formula.

The samples used for development of other credit scores were taken at different points in time and contain factors unique to each credit reporting company. As a result, variations in the scores were caused not only by differences in the credit reports, but also by differences in the scoring formula.

VantageScore is easier for lenders to explain and consumers to understand. VantageScore uses a scale that approximates the academic grading scale: A, B, C, D, and F. A simple letter grade associated with a numeric score will help people much more easily grasp their overall credit standing.