The 3 credit bureaus jointly developed Vantage as a way to provide scores to consumers for free. Using the FICO algos and getting their scores costs money, as anyone who uses them has to pay FICO.
It's a unique arrangement in that everyone depends on the credit bureaus for reporting purposes, but nobody uses their Vantage scoring algos for the purpose of determining credit risk, lending, etc.
@LADave wrote:
@TheKid2 wrote:The 3 credit bureaus jointly developed Vantage as a way to provide scores to consumers for free. Using the FICO algos and getting their scores costs money, as anyone who uses them has to pay FICO.
Do you have a source for this? Everywhere else I've looked into indicates that VS was created for the same purposes as FICO (scoring risk for lenders) while cutting out the middleman.
There are lenders that do use VS for that purpose, including small/smallish credit unions and Synchrony. The fact that it's available as an "educational" score from some free websites is a bonus, but not the intended outcome.
Admittedly it's a generalization, but if you just google up on the history of Vantage score you will find lots of reading. They created it as an alternative to FICO, which I read as a potential competitor. There's certinaly no denying that FICO makes tons of money and the CRAs most certainly would love a piece of that.
Some smaller shops or store cards may use VS and it will be hyped no doubt. But, it's just basically marketing. If you want credit for anything that really matters (house, car, loan, big bank CC, etc), they are going to pull FICO. In fact, they are going to pull a different version of FICO depending on what it is for. Your average consumer is fooled by this. I mean, how many people come here with their CK score and not understand why they didn't get approved for a mortgage?
Frankly, VS probably causes more confusion and hurts more people. Every free site showing your VS is going to blast you with how applying for more credit "will help your score", when in most cases it is the last thing someone should be doing. They are trying to make money off your insecurity.
I'm thankful that we have MF and this forum to show us the real deal!
Yes yes yes and yes to ALL of this!