New Credit Score System Revealed
A: The 3 major credit agencies today revealed a new system called "VantageScore" for computing one's credit rating after a need for a systemwide overhaul has been hotly debated for years. The goal: Simplifying the loan process for both lenders and borrowers. Story.
According to the article:
The announcement by Equifax, Experian and TransUnion said the new "VantageScore" was "a direct result of market demand for a more consistent and objective approach to credit scoring." "Under the new scoring system, credit score variance between credit reporting companies will be attributed to data differences within each of the three consumer credit files and not to the structure of the scoring model or data interpretation," the agencies said in a joint statement.
This is so important because a person's credit score is directly related to how much a lender will ultimately lend and the rate they are willing to provide. The better the credit score, the more you can borrow at a lower interest rate.
The new scoring system will range from 501 - 990.
According to Experian, the rating categories will be as follows:
A -- 901-990
B -- 801-900
C -- 701-800
D -- 601-700
F -- 501-600
The new scores will be available immediately!
~ Major Credit Agencies Adopt Uniform Score
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