A person’s credit history is a very precious thing for everyone. It determines how people manage their finances and plans from one payday to the next. For credit, we talk about how a person manages and deals with his loans. This is the reason credit scores have been invented, much to the public’s dismay. This is why you should focus on your Vantage Score.
What Is The Vantage Score?
The Vantage Score was developed in 2006 and was unveiled by the three bureaus: Equifax, Experian, and TransUnion. It was intentionally designed to compete with the market credit powerhouse FICO Score.
Throughout the years, Vantage Score simply sat under the shadow of the FICO Score as the latter took near 90 percent of the market share. To date, VantageScore Solutions, LLC claims that they are gaining more ground as more and more companies are using Vantage Score.
Vantage Score is driven by different factors:
– Recent credit (30%)
– Payment history (28%)
– Credit utilization (23%)
– Credit balances (9%)
– Depth of credit (9%)
– Available credit (1%)
With the information provided by the three bureaus, it would be factored in with the percentages to arrive at your Vantage Score. However, there are still some things that are quite unknown with Vantage Score’s calculations that the public are still baffled about.
How Important Is The Vantage Score?
Much like any credit rating mechanism, Vantage Score basically functions the same. It determines the person’s capacity to manage and pay his loans. The factors are there to determine if you are a great risk to take or not. Either way, your credit history would have to speak for itself.
Even if FICO Score is still the leading credit rating among banks and business, Vantage Score is slowing creeping behind. They claim that their score is now being used by:
– 7 out of the Top 10 major financial institutions,
– 8 out of the Top 10 credit card issuers,
– 6 out of the Top 10 auto lenders, and;
– 5 out of the Top 5 mortgage lenders.
You may one day want to apply for a loan with one of those companies and not realizing your Vantage Score is poor. As it is, you might want to take the time and check your credit history and make adjustments to improve your Vantage Score.
How Important is Vantage Score To You?
Truth be told, there are still a lot of skeptics out there when it comes to the use of Vantage Score. They say that it is used by those businesses, but so far, there is yet any documentation as to who these businesses are.
Also, the market share dominance of FICO Score is still apparent. For those who rely of FICO Score, they would have little to no reason why they should be switching to Vantage Score. Maybe the only reason why they would be forced to is when they have to deal with a company that utilizes Vantage Score.
Vantage Score has been around for a while and we have yet to see it become a competitor of FICO Score. And yet, we have to be prepared, because in a few years, Vantage Score might take center stage.