Are You Ready For A New Credit Scoring System?

Janet just ordered her free annual credit report and was excited about what she saw on her report. She decided to order her FICO score, and low and behold, her score increased over eighty points from the last credit report she ordered over a year ago.

She had worked hard to pay off her credit cards throughout the year and was pleased at the positive results on her credit report.

Janet was so excited that she finally figured out how to improve her credit report and FICO score.

Unfortunately, as soon as she found out about her great credit report and FICO score, she ran across some information about a new credit scoring system that was going to be effective soon!

She said to herself, I can’t believe it! I worked so hard on improving my score and now they come up with this!

Just when you thought you knew how to understand and obtain your FICO score, the whole credit scoring system is about to change!

The three credit bureaus have decided to flip the script on us and have worked together to create a new credit scoring system. It’s called the VantageScore.

Why have the three credit reporting bureaus; Experian, Equifax and TransUnion decided to create a new credit scoring system?

They claim the new scoring system will reduce discrepancies between your scores and the three bureaus.

These bureaus indicate that the VantageScore, returns more accurate scores on consumers which may have a credit history which is limited.

Are the credit score ranges the same for VantageScore and my FICO score? No. The VantageScore will have a range from 501-990. For instance, a score of 901-990 is an A; 801-900 is a B; and 501-600 is considered an F.

The FICO credit scoring system has a range from 300-850. It appears that the VantageScore system may be tougher than the current FICO score.

For example, if you have a FICO score of 720 you could get a 9% interest rate on a credit card you may have applied for.

With the VantageScore, your interest rate for this same credit card may be as high as 20%!

The VantageScore became effective for commercial use on March 14, 2006. Time will tell, how effective this system will be for creditors and consumers.

It appears that the new scoring system may be more advantageous to the creditors rather than the consumer, since the VantageScore ranges are much higher to qualify for a good interest rate.

This would appear to allow creditors the ability to charge consumers more for products and services purchased.

As a consumer, make sure you become informed about the new VantageScore system and how it will affect you!

Although the FICO scoring system can be still used by your creditor, they have an opportunity to choose which system they will review for your credit.

Now there are two systems currently. How long the FICO scoring system will be around is anyone’s best guess!

Learn more here in my section explaining all about loans and credit cards guide to help you get rid of debt and prevent further financial crisis.

What’s your biggest issue? How do you handle it – or can you think of any additional tips you can share with others if you don’t have an issue with this in your life?

Share them with us below – and then share this blog post on Twitter or Facebook or wherever you feel it could help someone you know.

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Money Matters.

"Power Tips" magazine is back!
You Get A Free Complete Self Help Report delivered to your email box every edition, plus you get a free PLR article and other great gifts!

SUBSCRIBE BELOW ...  I promise you will want to USE what you learn!

I really want to know what you think of this site, this page, and to hear your tips or suggestions about it.

So please share your story or simply add a Comment in the comment box.

If you feel that the information on this page has been useful to you please give it a Like or share it with your friends - thanks!!

You are a life Saver!!

I recently discovered this site and I can tell you that my life has not been the same. I now come here EVERYDAY and spend at least 1 hour.

I used to spend that time browsing online fashion and beauty magazine which just means that I spend more. Now I have replaced that habit with coming here.

In future I will think about contributing articles as well. Thank you! Thank you!! Thank you!!! and God bless"

Contact Us | About Us | Terms of Use | Privacy Policy | FAQ | Testimonials

Amazon and the Amazon logo are trademarks of, Inc. or its affiliates. As an Amazon Associate I earn from qualifying purchases. Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.