![]() ![]() At the same time, you may still encounter the VantageScore system from time to time, so it helps to understand how it works. Fannie Mae, Freddie Mac and the FHA all use rely on FICO scores for evaluating credit, and as they go, so goes the mortgage industry. That doesn't seem likely to happen, at least in the immediate future. Since they developed the VantageScore system, they don't have to pay another company for using it - provided they can get lenders to embrace it instead of FICO as the primary system for evaluating consumer credit worthiness. The new system doesn't fix that.Ī bigger reason is likely because the three credit agencies have to pay FICO's parent company, the Fair Isaac Co., licensing fees for using the FICO system. However, skeptics note that the main reason FICO scores vary among the three credit bureaus is because lenders don't always report the same information on a borrower to all three - some lenders and creditors may only report borrower performance to one of them, for example. They also say the new system is easier to understand every hundred point range in the VantageScore system corresponds to a letter grade - A, B, C, D or F - that gives the consumer an instinctive feel for where their credit stands. So why did the three credit reporting companies, Experian, Equifax and Transunion, develop the new system in the first place? They say one reason is for consistency - FICO scores frequently vary when reported by the three different bureaus. ![]() So while a score of 770 represents excellent credit under FICO, it's a fairly middling score under the VantageScore system. The VantageScore system operates in a similar manner, but uses a range from 501-990. The FICO system reports scores on a range from 301-850, with higher scores signaling better credit. It was developed by them as an alternative to the dominant FICO credit scoring system that lenders have traditionally relied on.įor consumers, the biggest difference between the two is how they report your credit score. ![]() But these days, you need to know which type of credit score you're getting.Ī new credit scoring system, called VantageScore, is being promoted by the three major credit reporting bureaus. ICB Solutions | NMLS #491986 ( Close ModalĬhecking your credit score is one of the first things borrowers are urged to do when shopping for a mortgage. Mortgage products are not offered directly on the website and if you are connected to a lender through, specific terms and conditions from that lender will apply. will not charge, seek or accept fees of any kind from you. By submitting your information you agree Mortgage Research Center can provide your information to one of these companies, who will then contact you. For a full list of these companies click here. If you submit your information on this site, one or more of these companies will contact you with additional information regarding your request. ICB Solutions and Mortgage Research Center receive compensation for providing marketing services to a select group of companies involved in helping consumers find, buy or refinance homes. Neither, Mortgage Research Center nor ICB Solutions are endorsed by, sponsored by or affiliated with any government agency. ICB Solutions partners with a private company, Mortgage Research Center, LLC, (nmls # 1907), that provides mortgage information and connects homebuyers with lenders. is a product of ICB Solutions, a division of Neighbors Bank. ![]()
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