VantageScore is the second largest credit scoring model. It’s slowly gaining momentum, but may become very important soon.

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VantageScore 4.0 takes payment history into greater consideration than its previous generation.

VantageScore is a credit scoring model developed by the three major credit bureaus: Experian, Equifax, and TransUnion. 
VantageScore 4.0 takes your monthly revolving credit balances from the past 24 months into account.
The FHFA approved VantageScore 4.0 and FICO 10T for use by Fannie Mae and Freddie Mac in October 2022.

When someone talks about their credit score, they are usually referring to their FICO score, the oldest and most widely used scoring model. However, VantageScore is, year by year, gaining on FICO.

The second-place credit scoring model, VantageScore had a user base of 2,500 lenders pulling 12.3 billion VantageScore credit scores from July 2018 to June 2019. From March 2021 to February 2022, VantageScore boasted a user base of over 3,000 lenders pulling 14.5 billion credit scores. 

The large majority of lenders still rely on FICO scores when they make lending decisions, but VantageScore is increasingly relevant. Here’s everything you need to know about VantageScore and how it works.

What is VantageScore?

VantageScore is a credit scoring model that was designed by the three major credit reporting agencies: Equifax, TransUnion, and Experian. 

Like other credit scoring models, VantageScore is designed to measure the creditworthiness of a consumer. The higher your credit score is, the more likely you are to pay your outstanding debts. This means less risk for lenders, which leads them to lower your interest rates. 

Comparisons are often drawn between GPAs and credit …read more

Source:: Businessinsider

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