How the VantageScore Could Benefit Livermore Home Buyers

VantageScore FactsFICO has been the only game in town for credit scores during the past couple decades. Knowing your FICO score is akin to knowing your Social Security number – it’s become that important to our lives. FICO is proof of our financial existence.

Those without a FICO score have been left under-served by financial institutions – until recently. A few years ago, the “Big Three” credit reporting agencies – TransUnion, Equifax and Experian – got together and created their own credit scoring system to compete with FICO. It’s called VantageScore, and it’s gaining ground!

A recent CNN Money article says that 4 of the 5 largest mortgage lenders in the country are now using VantageScore in their lending decisions. This is good news for first-time home buyers and others who may have thinner credit profiles. Here’s why!

Unlike FICO,  VantageScore takes public records into consideration. VantageScore also considers monthly rent payment history and payment records of utility bills. It assigns a numerical value to this information and provides a credit score. This will help an estimated 30 million consumers who never had a FICO score because they never borrowed money.

VantageScore also treats collection accounts differently than FICO. Under VantageScore, you will not lose points for having a collection account on record, so long as the outstanding balance is zero.

And because VantageScore was created by the credit reporting agencies themselves, unlike FICO, which is an outside company, there is less variety in how payment behaviors are interpreted. VantageScore claims that most consumers see a “lift” in their credit score under their system.

There is one limitation in credit score accuracy that neither VantageScore or FICO can prevent: the fact that not all lenders report to all credit bureaus, or do so accurately. Your credit score, no matter what method produced it, will only be as good as the data supplied to the credit bureaus. This is why it remains important to check your credit report at least once a year.

You can learn more about VantageScore by viewing the offical website. FICO isn’t going to go away anytime soon, but VantageScore is making inroads with financial companies, credit card providers, mortgage lenders and auto loan companies. It pays to know something about it!

Looking for more information about buying a Livermore home? Let me help you! I will refer you to reputable mortgage lenders in the area, and I can help you find the ideal home for your needs and budget. Please feel welcome to contact me for the latest home sale details in Livermore, Pleasanton or Dublin. I’ll answer your questions, and provide expert guidance for your success!

John Kurtzer
Your Livermore Real Estate Expert
RE/MAX Accord

Livermore Real Estate
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