FICO credit scores have faced many controversies for the past years. They have been blamed for the mortgage crisis and they were accused for having inaccurate and unreliable scores. To make it worse, they have a new enemy created by its three most powerful connections – the three major credit bureaus Experian, Equifax, and Trans Union.
Many customers got confused with the issue. They have been asking questions like, “will Vantage Score replace FICO?”or “what will become of FICO?”.
Vantage Score was created by the three main credit bureaus in 2006 so it can set it up within the credit market as a competitive item. But too many, it was actually created as FICO score’s direct competitor. FICO filed a lawsuit fighting those bureaus for issues such as trademark infringement regarding the credit score range. FICO is trying to say that the Vantage Scores can mislead customers.
Presently Vantage Score had won the case and FICO is denied of a new trial. U.S. District Judge Ann Montgomery ordered the US Patent and Trademark Office or PTO to cancel the 300 – 850 trademark of Fair Isaac once the appeal is concluded. Vantage Score is still able to use its 501 – 990 score range.
The birth of Vantage Scores was greeted with positive welcomes. As of now, four out of those top five financial institutions are using them. Eight out of top ten card issuers are also viewing them. Many of mortgage originators and auto lenders are having Vantage Score as their score basis.
The difference between FICO scores and Vantage Scores are solely on the range used. FICO’s scoring system range from 300 – 850 while Vantage Score uses the 501 – 990 range with a letter grades of A to F. The formulas of both are not disclosed still making consumers doubt as to the accuracy of both scores.
As to the question, “which is better?”, there is not much of an answer since both are supported by thousands of lenders and financial institutions. Vintage Score still claims that its system is easier to interpret because they have the letter grades (A – F). In addition, the Vantage scores calculated by the three bureaus differ with each other due to differences in credit reports. The differences are only slight but it continues to diminish, Vantage Score Solutions Inc. says. FICO scores are more used or even mostly used by those who issue Mortgage Loans. Though these may be true, it is said that FICO won’t be falling and will be working alongside Vantage Score for years ahead.
Even if the question of which is which cannot be totally answered, the question of how credit scores in general are reliable continues to take place. Many financial institutions have lessened their reliance on the scores and are using other bases to make credit or financial decisions. Consumers are also worried about their credit scores but tend to care more of their credit reports than the scores.
