CREDIT & MONEY MANAGEMENT


Shootout at the Credit Score Corral

There's a new sheriff in town. Until recently, the FICO score was the measure lenders used almost exclusively to grant credit and set your interest rate. Now when you submit a credit application, the bank, finance company or card issuer is as likely to use the VantageScore, a competitor created by the three major credit bureaus: Equifax, Experian and TransUnion.

Like the FICO score, VantageScore measures how risky a borrower you are. Scores range from 501 to 990 (FICO scores range from 300 to 850). Although both collect the same information to create your score, each weights the data slightly differently. For example, your payment history makes up 32% of your VantageScore, a little less than the 35% it counts in your FICO score.

When you request a VantageScore, you receive both the numerical score and a letter grade, from A to F. Sheldon Kasower, founder and chairman of CreditReport.com, a consumer credit-information company, says the letter grades make the VantageScore easier for consumers to understand.

Because VantageScore is owned by the three credit bureaus, which jointly created the algorithm that produces the score, Vantage-Scores tend to be more consistent than FICO scores. Barrett Burns, of VantageScore, says that 60% of the time the scores that each of the three bureaus issue for an individual are within 20 points of one another. He also says that VantageScore is more inclusive than FICO. If you have not used credit for six months, you might lose your FICO score.

VantageScore looks back 24 months to pick up data on credit usage, says Burns. You can get your VantageScore for $7.95 at Experian.com.

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