Big changes coming to credit card scoring.

[DaveInAZ]

@K-in-Boston wrote:
That article was a mess. While Vantage scores may have been given 8 billion times (since most Free Credit Score apps and websites use them), there is no way the scores were used to determine credit applications that many times.

- The AP article doesn't say Vantage scores have been given 8 billion times, it claims "VantageScore handled 8 billion account applications last year", and goes on to assert "so if you applied for a credit card, that score was likely used to approve or deny you". I'm skeptical, but it is the Assoicated Press, not some blogger in his parent's basement.

I really despise the Vantage model to be honest. There is no way that someone with 1/10th of my income, 1/10th of my credit history, late payments or worse, etc. should be scored significantly higher because Vantage doesn't like new accounts, moderate utilization, and high credit limits.

- I'm not a fan of Vantage either. I got TU to early exclude the 7 accounts included in my 2010 BK7, many with lates, and while my TU Fico jumped 677 to 720, while my TU Vantage cratered from 722 to 700. My factors - util, payments, AAoA, inquires - all remained the same, just the removal of those 7 accounts. Maybe Vantage really does hate those high CLs, I combined to Cap One QS cards and the new $20k CL reported.

I do wonder if the subprime lenders are starting to use Vantage scores, though? Yesterday I got a prequalified offer in the mail from Barclay for the MasterCard Black Card with their lowest APR, but I also got an offer for a guaranteed $1000 line from First Premier with $149 setup fee, $99 annual fee and 27.9% APR. My FICO scores are adequate to qualify for pretty much everything under the sun, but my Vantage scores have always been quite firmly in the "Fair Credit" range of 600-660. Something happened with my EQ on Credit Karma a few weeks ago that made it spike up to like 695 but then the next update it was back down to like 640, while my EQ FICO 08 was more than 100 points higher.

- Yeah, probably some subprime lenders, but also smaller lenders. In Feb 2015 I got a car loan from a small local CU. I asked the rep my CS and she said my EX was 704, which matched exactly with my EX Vantage score. The CU only reports the loan to EX & EQ, so they probably don't use FICO.

[Anonymous]

I have heard rental co use vantage and somebody said carvanya (used cars) pulled vantage  I personally use the data for inq, limits. % utilz but not  for scoreing.  Vantage Equifax hates my dw with scores well below real Fico 

[NichelleN]

"Stay tuned to hear how credit scoring is changing and how it will impact you"

My local news just covered this. I hadn't heard of credit scoring changing in the fall so I was listening closely. Then the broadcaster came to the end of the story and noted that this is for Vantage scoring. She mentioned the 8 billion number. However, there was no mention of FICO scoring at all. Now, I'm thinking of all of the consumers who heard that story and have very little information on FICO.

[Thomas_Thumb]

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DaveInAZ wrote:  

- Yeah, probably some subprime lenders, but also smaller lenders. In Feb 2015 I got a car loan from a small local CU. I asked the rep my CS and she said my EX was 704, which matched exactly with my EX Vantage score. The CU only reports the loan to EX & EQ, so they probably don't use FICO.

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K-in-Boston wrote:

That article was a mess. While Vantage scores may have been given 8 billion times (since most Free Credit Score apps and websites use them), there is no way the scores were used to determine credit applications that many times.

- The AP article doesn't say Vantage scores have been given 8 billion times, it claims "VantageScore handled 8 billion account applications last year", and goes on to assert "so if you applied for a credit card, that score was likely used to approve or deny you". I'm skeptical, but it is the Assoicated Press, not some blogger in his parent's basement.

I really despise the Vantage model to be honest. There is no way that someone with 1/10th of my income, 1/10th of my credit history, late payments or worse, etc. should be scored significantly higher because Vantage doesn't like new accounts, moderate utilization, and high credit limits.

- I'm not a fan of Vantage either. I got TU to early exclude the 7 accounts included in my 2010 BK7, many with lates, and while my TU Fico jumped 677 to 720, while my TU Vantage cratered from 722 to 700. My factors - util, payments, AAoA, inquires - all remained the same, just the removal of those 7 accounts. Maybe Vantage really does hate those high CLs, I combined to Cap One QS cards and the new $20k CL reported.

I do wonder if the subprime lenders are starting to use Vantage scores, though? Yesterday I got a prequalified offer in the mail from Barclay for the MasterCard Black Card with their lowest APR, but I also got an offer for a guaranteed $1000 line from First Premier with $149 setup fee, $99 annual fee and 27.9% APR. My FICO scores are adequate to qualify for pretty much everything under the sun, but my Vantage scores have always been quite firmly in the "Fair Credit" range of 600-660. Something happened with my EQ on Credit Karma a few weeks ago that made it spike up to like 695 but then the next update it was back down to like 640, while my EQ FICO 08 was more than 100 points higher.

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VantageScore is used heavily in the rental property market and in pre-qualification assessments for credit cards. Pre-qualifications are often solicitations and it is important to identify target demographics at a low cost. It has nothing to do with subprime. Fico is not low cost.

Pre-qualification should never be taken as pre-approval. In most cases credit scores used for approvals are based on Fico algorithms.

[Anonymous]

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@Thomas_Thumb wrote:

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VantageScore is used heavily in the rental property market and in pre-qualification assessments for credit cards. Pre-qualifications are often solicitations and it is important to identify target demographics at a low cost. It has nothing to do with subprime. Fico is not low cost.

Pre-qualification should never be taken as pre-approval. In most cases credit scores used for approvals are based on Fico algorithms.

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I hadn't previously known that Vantage is used for pre-qualification screenings (as opposed to actual approval) on CC's - that adds yet another wrinkle to the whole business. This does confirm an earlier suspicion, though, as to why so many places use Vantage rather than FICO in offering free credit scores to their accountholders - it's cheaper. (It definitely marks Capital One as a pennypincher, though; you'd think that once someone was an interest-paying accountholder of theirs, they'd be willing to give you FICO scores as a benefit. Discover, Synchrony and Penfed - the last, granted, in a different version than the usual FICO 8 - do, after all, in my own personal experience.)