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Big changes coming to credit card scoring.

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Frequent Contributor

Big changes coming to credit card scoring.

Interesting read. Could some banks be using this now resulting in the recent AAs?

 

http://triblive.com/business/headlines/12211995-74/changes-coming-to-credit-score-calculations

 

 

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Message 1 of 15
14 REPLIES 14
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Moderator Emeritus

Re: Big changes coming to credit card scoring.


@Benzman wrote:

Interesting read. Could some banks be using this now resulting in the recent AAs?

 

http://triblive.com/business/headlines/12211995-74/changes-coming-to-credit-score-calculations

 

 


The article refers to changes in Vantage scores not FICO so no this has nothing to do with any AAs.  No idea where the author assumes that banks are using Vantage scores in approving or denying credit cards.  That's just not the case

Message 2 of 15
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Valued Contributor

Re: Big changes coming to credit card scoring.

I see validity if certain lenders use Vantage to pull credit more often because I assume it costs less for that service-- or they wouldn't be providing it free to everyone. I knows firsthand the less credit seeking I do the more the Vantage score gets in line with my real scores. I acquire new credit my real FICO often stays the same or goes up and vantage dips. I see Vantage as a good snapshot but not the whole story.
Open one, close three. Open one, close three.
Message 3 of 15
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Moderator

Re: Big changes coming to credit card scoring.

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.

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 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.
Message 4 of 15
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Senior Contributor

Re: Big changes coming to credit card scoring.


@Irish80 wrote:

@Benzman wrote:

Interesting read. Could some banks be using this now resulting in the recent AAs?

 

http://triblive.com/business/headlines/12211995-74/changes-coming-to-credit-score-calculations

 

 


The article refers to changes in Vantage scores not FICO so no this has nothing to do with any AAs.  No idea where the author assumes that banks are using Vantage scores in approving or denying credit cards.  That's just not the case


Well, I know Fair Issac claims that FICO scores are used by "90% of lenders", but this statement in the article caught my attention: "VantageScore handled 8 billion account applications last year, so that score was likely used to approve or deny you.". So I Googled "VantageScore handled 8 billion account applications last year". The "author" is the Associated Press, and that same article is being widely reprinted, including by the NY Times.

 

I think the changes in VantageScore may well have something to do with AAs, as the new "Trended Data" is designed to to see warning signs long before a borrower actually gets into serious trouble. Trended data will score someone who is paying down debt higher than someoene just making minimum payments. This statement particularly concerns me: "But VantageScore will now mark a borrower negatively for having excessively large credit card limits, on the theory that the person could run up a high credit card debt quickly". "Theory"? Here's my theory: If I have $60k in CLs accross a dozen cards with an average of $5k CL, I can run up CC debt just as fast than if I just had 3 CCs with $20k CLs.

 


Message 5 of 15
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Moderator

Re: Big changes coming to credit card scoring.

Now, now, DaveInAZ. It's only logical that someone with $20k in credit lines spread across 40 $500 store cards that they got 24 months ago from the same two lenders handles credit much more responsibly than the person who has had a $10k BOA card for 3 years, a $5000 Chase card for 2 years, and just got a $5000 AmEx card.
Message 6 of 15
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Senior Contributor

Re: Big changes coming to credit card scoring.


@K-in-Boston wrote:
Now, now, DaveInAZ. It's only logical that someone with $20k in credit lines spread across 40 $500 store cards that they got 24 months ago from the same two lenders handles credit much more responsibly than the person who has had a $10k BOA card for 3 years, a $5000 Chase card for 2 years, and just got a $5000 AmEx card.

Well, K-in-Boston, you do have a point there - I just got me a brand new swimming pool on my $500 Wally World store card -

 

trailer-trash-610x250.jpg


Message 7 of 15
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Valued Contributor

Re: Big changes coming to credit card scoring.


@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.

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 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.

Odd. It's consistently been the reverse for me. My Vantage scores have consistently been higher than my FICO 8 scores. The latest VS for TU is 684 (after my Penfed car loan finally reported to them last week), 684 for EX, and 691 for EQ, as compared to 627 (as of the end of March) TU FICO 8, 662 EX FICO 8 and 659 EQ FICO 8 (another joker in the deck is that EQ FICO NextGen 2, used by Penfed, is 690, just one point lower than my Vantage score).

Ch 7 BK discharged 11/28/14, credit rebuild well advanced. FICO:TU 680 FICO 8 (3/2/19) or 687 FICO 9/EX 694 FICO 8/EQ 685 FICO 8 or 674 FICO 9 (NFCU 3/3/19), VS 3.0 10/17/18: TU 702/EX 699/EQ 698. $92.9k revolving credit as of 1/31/19; $1K NFCU cashRewards Visa, $2K BJ's Perks MC, $5.1k Discover It #1, $6.5k Discover It #2 (new 3/12/18), $3.5k Petal Visa, $6k Paypal 2% CB MC, $6k Amazon Prime Store Card, $6k Walmart Store Card, $7k Apple FCU Platinum Visa, $7k Penfed Power Cash Rewards Visa, $11.8k Overstock Store Card, $15K Care Credit, $16K Cap One QS Rewards Visa Signature, $10k PenFed used car loan, $5k Navient student loan, $12.7k Lending Club loan. Gardening: 3 months, 19 days as of 1/31/19. 24 HP inqs total as of 10/12/18: 10 TU, 9 EQ, 5 EX (about half over 1 year old).
Message 8 of 15
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Valued Contributor

Re: Big changes coming to credit card scoring.

My vantage scores are all around 660-670 but my ficos are all above 760+ in Fico8.. no lender that I've ever applied for has pulled a vantage score, IMO vantage scores are beyond dumb... I PIF my card and my score drops 9 points 😂 Lol.
Message 9 of 15
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Senior Contributor

Re: Big changes coming to credit card scoring.


@Irish80 wrote:

@Benzman wrote:

Interesting read. Could some banks be using this now resulting in the recent AAs?

 

http://triblive.com/business/headlines/12211995-74/changes-coming-to-credit-score-calculations

 

 


The article refers to changes in Vantage scores not FICO so no this has nothing to do with any AAs.  No idea where the author assumes that banks are using Vantage scores in approving or denying credit cards.  That's just not the case


Where is the writer getting the information that Vantage score handled 8 billion applications?

Message 10 of 15
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