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Nothing comes for free - Change can cost the most
As with any other administrative adjustment, there are costs involved. Just because the three credit bureaus are proposing a new scoring model to lenders, mind you - it's in their best interest to cut out Fair Isaac's share of revenue generated, doesn't mean that the switch from FICO to VantageScore is coming at a small price tag.
Most of the largest lenders in the USA are utilizing the FICO scoring model to gauge the loan applicant's credit risk. 75% of mortgage financing decisions are originating by utilizing the FICO scoring model and having beein deeply entrenched with Wall Street for over 50 years, is certainly helping Fair Isaac to retain a good position to overthrow the attempt to launch VantageScore.
Should the VantageScore stand the test of time and comparison to the well established FICO score, it may require administrative changes, different procedures and may lead to changes in how credit worthiness will be established, loans distributed and interest rates charged.
The VantageScores will be available through Experian at first, while Equifax and TransUnion will follow suit shortly thereafter. Costs to obtain your score may fluctuate from bureau to bureau and the actual accuracy in comparison between borrowers has yet to be validated.
In short; is it a better proposition, with easier to understand guidelines and calculations or just a blatant attempt to cut out the middle man (Fair Isaac) to take a share or the three bureaus profits?
If you have an opinion, please feel free to add to this article, we're looking forward to hearing more from you, the consumer.
SmartCredit.us
