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VantageScore 2.0: New Credit Score

By on April 5, 2011 in Credit

As if there wasn’t already enough to worry about when it comes to your credit score, a new credit score has been created. The three primary credit reporting agencies—TransUnion, Experian and Equifax–came together to create VantageScore 2.0. As a consumer, you should be aware of the new credit score and how it may affect your ability to obtain new credit in the future.

The Purpose

The primary reason for introducing the new credit score is consistency. As the current credit reporting system stands, each of the three agencies maintains its own records. This means that the information and score on a credit report from one agency may be different from another. The joining of the three agencies on VanatageScore 2.0 eliminates this inconsistency problem.

Score Report

As of the first quarter of 2011, the VantageScore 2.0 credit score is available to consumers and creditors when ordering scores from Experian or TransUnion. Equifax is not currently reporting the VantageScore 2.0 score on its reports yet. It has not been announced as to whether or not this will change or when.

The Future

The most popular credit score for lenders and creditors is the FICO score. As of now, this has not changed with the introduction of the new credit score. Analysts and financial experts are not saying too much on how the introduction of the new score is expected to change the lending landscape. Even if a lender decides to use the VantageScore 2.0 credit score over the FICO score, similar factors go into calculating different credit scores. Also, keep in mind that credit scores, no matter which ones you are talking about, can and do change according to your spending, payment and borrowing behaviors.

While the introduction of the new credit score, VantageScore 2.0, may seem a bit confusing, once you break it down, it shouldn’t change anything. If you pay your bills and pay your bills on time and keep your outstanding balances at a reasonable level, then your credit scores will reflect this. Whether it’s your FICO or VantageScore 2.0 that lenders consider, your positive consumer actions will shine through in either one.

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