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Credit Reports
Types of Credit Reports:
-Single
-3-in-1
-Credit Monitoring System
-Free Credit Report
Credit
Report Basics:
-Ordering
a Report Yearly
-Common
Questions
-Determining
Scores
-Interpreting Reports
-Disputing
Errors
--more
basics
Credit Achieving Tips:
-Improving
Credit Scores
-Building Credit
-Re-building
Credit
Credit Scoring Blunders:
-Late
Payments
--more
mistakes
Identity Theft:
-Identity Theft Basics
-Resolving
-Preventing
-Kids
& Identity Theft
-Seniors & Identity Theft
-Internet Phishing
Mortgages
Auto Loans
Personal Loans
Debt
Consolidation
Credit Cards
Home
-Taxes
-Managing Money
-Credit Help
-Checking Accounts
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NEW SYSTEM FOR CREDIT SCORING!
There is new scoring system being used by Transunion,
Experian and Equifax, that helps determine whether or
not a potential borrower is a credit risk.
Currently, a unique formula is being used by all three
major credit reporting agencies to formulate
credit
scores. As a result, consumers and lenders receive
three, often vastly, different scores. In order to gain
a thorough profile, consumers will need to obtain all
three of their credit scores from the major reporting
agencies. This can be done by purchasing a 3-in-1
credit report.
This new formula is also going to make it simpler for
those with limited or no credit histories to obtain a
credit score. The purpose of this new model is to help
identify a borrowers' credit risk more precisely.
Credit score discrepancies will not be eliminated by the
new VantageScore. There are many different factors that
make up credit scores, i.e. amount of debt, payment
history, amount of available credit, the length of time
credit has been had, etc.. Any type of bank or lending
institution including but not limited to mortgage
lenders, credit card companies, auto financing
institutes, etc.., will use credit scores to
determine the risks when lending money and issuing
credit cards and lines of credit.
The VantageScore will be available to all consumers in a
few months and will be able to be purchased from all
three credit reporting bureaus. It still is not clear as
to how creditors and lenders are going to use this new
scoring system.
The bottom line is that FICO scores are accurate, with
the majority of lenders not likely swaying from the
system. However, the VantageScore is going to make it
easier for consumers to comprehend their credit
worthiness as a result of the letter grades this system
is going to use.
Individuals with 'A' credit are going to be
eligible for the best interest rates. those with 'F'
will pay the highest rates, or may not even be able to
obtain credit. The new system used scores that range
from 501 to 990, compared with 350 to 850 for FICO
scores.
Consumers should not get confused by this scoring
system. For example, an 800 score with the new system is
equal to a C, which is mediocre. On the contrary, an 800
score with the FICO system is considered great credit.
Below is a breakdown of what letter grades are going to
be assigned to what range of number scores.
A - 901-990
B - 801-900
C - 701-800
D - 601-700
F - 501-600
It is anticipated that the new VantageScore will provide
consumers with consistent information that can be used
to analyze their credit standing, and ultimately helping
them to make wise financial choices.
This new system may also help consumers understand what
is needed for them to improve their scores and/or fix
errors.
**Consumer Alert - FICO has
recently decided to
eliminate authorized user accounts from the credit
scoring model. This will have a major impact on
those looking to establish credit histories or rebuild
credit.
More Credit Report
Articles
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