topic VantageScore equation not what it seems in General Credit Topics

VantageScore equation not what it seems

Gallager2014 — Fri, 31 Aug 2018 23:32:51 GMT

Let me start with that I know there is a difference between FAKO score (mainly VantageScore) and FICO score.

All the marketing material says that VantageScore only cares about your last 24 months in regards to payment history. I now know it really cares about the last 7 years, just like FICO. My FAKO score was in the mid 600s for the past year for all 3 CRBs. My last baddie started dropping off this month for EX. My FAKO score shot up 50 points, while TU and EQ remained in the mid 600s.

Re: VantageScore equation not what it seems

Anonymous — Fri, 31 Aug 2018 23:56:37 GMT

I am surprised that you found material put out by Vantage that says its model ignores all derogs older than 24 months. Where did you find that?

Re: VantageScore equation not what it seems

iv — Sat, 01 Sep 2018 02:19:15 GMT

@Anonymous wrote:
I am surprised that you found material put out by Vantage that says its model ignores all derogs older than 24 months. Where did you find that?

In all fairness, Vantage has certainly implied something close to that in some of their publications.

For instance, from:

https://your.vantagescore.com/images/resources/VantageScore_ScoreImpactsWhitePaper-130305.pdf

"As time goes by, the event will have less and less impact until at some point it has no impact whatsoever, even though the timeframe for which the event remains in your file hasn’t ended. Typically after two years, most negative items have little impact on your credit score."

Of course, the qualifiers for "most negative items" and "little impact" aren't defined, so it's easy to mis-read phrasing like this as "clean in 24 months".

"Most" negative items are almost certainly 30 day lates... since you (usually) need to hit that prior to any worse lates kicking in. And "little impact" isn't "no impact". But I can understand the confusion. (Also not helped by the hand-wavy chart on page six of that linked document...)

Re: VantageScore equation not what it seems

Anonymous — Sat, 01 Sep 2018 02:47:30 GMT

I can certainly see why that language would lead almost anybody to think that that Vantage ignore derogs after 24 months. I didn't know they had put that out.

OP, what was the derog that fell off?

Re: VantageScore equation not what it seems

Gallager2014 — Sat, 01 Sep 2018 03:13:08 GMT

A 60 day and a 90 day on one account fell off.

Re: VantageScore equation not what it seems

Anonymous — Sat, 01 Sep 2018 03:32:14 GMT

Well, the link that iv gave pretty incontrovertibly says that all derogs cease to have any impact prior to them falling off your report:

As time goes by, the event will have less and less impact until at some point it has no impact whatsoever, even though the timeframe for which the event remains in your file hasn’t ended.

So clearly that's BS, given what you are reporting. Thanks for the heads up.

Re: VantageScore equation not what it seems

Anonymous — Sat, 01 Sep 2018 22:49:50 GMT

The date on that article is July 2012. Could this be referring to an older model?
It mentions an example of a score of 900 on page 7. Maybe there is a change between 2.0 and 3.0 that effects the way they calculate the impact of lates?
Just a thought.

Re: VantageScore equation not what it seems

Anonymous — Sun, 02 Sep 2018 11:14:56 GMT

Great catch! Thanks Sabii.

Re: VantageScore equation not what it seems

iv — Sun, 02 Sep 2018 18:28:31 GMT

@Anonymous wrote:
The date on that article is July 2012. Could this be referring to an older model?
It mentions an example of a score of 900 on page 7. Maybe there is a change between 2.0 and 3.0 that effects the way they calculate the impact of lates?
Just a thought.

Maybe?

The announcements for VS3.0 didn't explicitly call out 24-month vs 7-year timeframes in the context of lates... but there is some language around a 24-month number in general.

https://thescore.vantagescore.com/article/38/vantagescore-30-model-increases-scoreable-us-population

"The ability to utilize data in consumer credit files that is older than 24 months but remains predictive—an analytic breakthrough and major benefit to infrequent credit users."

https://www.vantagescore.com/pdf/FactSheet-VantageScore-3.0.pdf

"Built with an additional thirteenth scorecard for those without credit history in the previous 24 months supported by characteristics that produce a predictive credit score."

But I'm guessing that both of those statements are more related to VS3.0's standard 24-month tradeline activity window (vs FICO's 6-month window) - with FICO, you need at least one active account reported in the last 6 months, with VS it's the last 24 months. Apparently VS3.0 also added a separate scorecard for anyone without activity in the last 24 months, and will still give them a score, based on their 3-7 year old data.

I'm not seeing any reference to changing lates from a 24-month window to a 7-year window with VS3.0 (although most of the hype around VS3.0 was just about the switch from the 990 scale to the 850 scale, so that could have gotten buried).