Major Credit Bureaus Unite to Create FICO Alternative

In a move that has potentially huge repercussions, the credit bureaus announced yesterday that they have created a single, unified scoring method. The new scoring index is called the VantageScore. The new Vantage scoring system ranges from 501 to 990. The credit bureaus claim that this new credit score will be more accurate than current scores such as FICO.

This is from an article in the Salt Lake Tribune:

The nation's three major consumer credit bureaus have created a new credit scoring system designed to make it easier for financial institutions to evaluate loan applications and to give consumers a better way of measuring their financial health.

The credit reporting agencies - Equifax, Experian and TransUnion - announced Tuesday that they're introducing VantageScore to banks, mortgage lenders and credit card companies immediately. The new scores will be available to consumers after the lender rollout, probably later this year.

I like the idea of a unified credit score system rather than all the different scores (and different ranges) currently in use. Hopefully the VantageScore will help to reduce the confusion related to credit reports rather than add to the confusion.

For more information about VantageScore, visit VantageScore.com.