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Let's face it, the credit system isn't always fair and many customers are often subject to credit criteria, policies, or practices that prevent them from improving credit - or worse, damage their credit score over time. <br> <br>For example, if a company which you have services with goes bankrupt, whatever is left owing by a client will automatically be forwarded to the collections company handling the dissolution. Even though the client in question never missed a payment, according to their credit score, they now have a collections item listed on their bureau making improving credit necessary. Vantage Score is setting out to change this.
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Let's face it, the credit system isn't always fair and many customers are often subject to credit criteria, policies, or practices that prevent them from improving credit - or worse, damage their credit score over time. For example, if a company which you have services with goes bankrupt, whatever is left owing by a client will automatically be forwarded to the collections company handling the dissolution. Even though the client in question never missed a payment, according to their credit score, they now have a collections item listed on their bureau making improving credit necessary. Vantage Score is setting out to change this.
What is Vantage Score? A direct competitor of FICO, Vantage Score was released in early 2006 offering an alternative algorithm to provide a credit score to individuals who may not have qualified for credit prior, would have been penalized by the FICO system, or have had problems establishing or improving credit.
How does Vantage Score help with improving credit? As of 2013, Vantage Score 3.0 is now offering clients intent on improving credit the opportunity to do so by eliminating the 7-year wait for collection debts, adding new qualifiers, and new mortgage definitions.
Collections Unlike FICO, Vantage Score now disregards any paid collection item as a credit negative. The theory is, clients who have made the effort to pay are intent on improving credit and are responsible with their debts, so that the item happened isn't as important as how promptly it was removed.
Qualifiers Intent on widening the number approvals for those seeking credit, Vantage Score now takes into account individuals who don't use credit often but have used it within a 24-month period, have no open accounts or recent credit inquiry as a result of bankruptcy or long-term incarceration and must begin improving credit, or had a previous score with credit inquiry but have not used credit since.
Mortgages Most consumers understand the difference between a first mortgage, a second mortgage, or a home line of credit. Unfortunately, FICO doesn't and that is why Vantage Score aims to distinguish between high-risk and low-risk mortgages and mortgage credit inquiry.
