VantageScore is the name of a credit rating product that was created by the three major credit bureaus (Equifax, Experian, and TransUnion). The product was unveiled by the three bureaus on 14 March 2006. The VantageScore is an attempt to compete with the FICO score produced by FICO.
VantageScore vs FICO score
VantageScore and FICO score are different credit scores. FICO and the credit bureaus have allowed the public to know some information about the credit score categories and the corresponding calculation weights. FICO allows consumers get their generic or classic FICO score for Experian, TransUnion, and Equifax from myFICO website. Consumers can get their VantageScores from free credit report websites for a fee, and TransUnion and Experian offer their VantageScore to consumers through their websites. All three agencies use the same formula to calculate the VantageScore; however, there are still discrepancies between the resulting scores if run for each of the credit reports. This is due to different data the three agencies have on the credit reports. FICO, the original creator of the FICO Score, was not involved with the creation of VantageScore's new formula.
The three agencies have advertised the VantageScore as something that will help banks and lenders further drill down into the "subprime" categories. Subprime lenders are banks or other lenders dedicated to borrowers with less than perfect credit or harder to substantiate credit.
The old VantageScore goes from 501 to 990, as reported by TransUnion:
The VantageScore 3.0, the newest version, is between 300-850 from 2013.
Score calculation
While the exact details of how the score is calculated are unknown, VantageScore has released the categories and proportions used. What contributes to a positive score in each category, and to what degree particular data affect the score, is unknown. The score is meant to indicate the likelihood that a customer will pay the loan back on time and in a consistent manner; values which show behavior contrary to these are more likely to worsen the score, and vice versa.
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