Will my credit score change with VantageScore 4.0?
VantageScore 4.0 will not be available to lenders and other users of credit scores until later this fall and it will take some time for lenders to test and implement the new model.
Generally speaking, a consumer’s credit score will likely change from one model to the next. Because VantageScore incorporates many pioneering advances, the scores it generates will be more accurate than scores available today, so scores are likely to change somewhat as a result.
That said, all generic risk models are based on information in the credit files, and all generally assign higher scores to individuals with good credit-management habits—those who pay their bills on time, avoid “maxing” out credit cards or taking on excessive debt, and so on. Consequently, VantageScore advises consumers to focus on their credit behaviors and credit files. If they do so, whichever credit score they use to monitor their progress will improve over time.
Are lenders using VantageScore 4.0?
VantageScore 4.0 will not be available to lenders and other users of credit scores until this fall. At that point, they will begin testing the model and eventually make decisions to upgrade.
Why are credit scoring models rebuilt and why are there so many?
Credit scoring models like VantageScore 4.0 predict the likelihood a consumer will default on a loan (which is defined as being 90 days past due within a two-year time frame). They do so by applying statistical analysis to credit-history data stored in consumer credit files at the national credit reporting companies (CRCs)—Equifax, Experian and TransUnion. Over time, models can become less predictive due to changes in the economy, in consumer behavior, and in the variety of loan types and products available in the marketplace. By the same token, analytical technology and data quality generally improve over time. These trends mean model developers can continually generate increased predictiveness in newer models.
As VantageScore data scientists see new opportunities, they test different approaches and eventually build new models to help lenders make more precise decisions.
There are also many different types of credit scoring models used by lenders. These include models from VantageScore and FICO, as well as alternative models that use different types of consumer data residing outside of the CRCs’ files, industry-specific models used only for certain lending products, and custom scoring models developed at larger lending institutions that harness their own proprietary data.
How long is the credit data trended?
The trended credit data that VantageScore 4.0 incorporates may go back two years.
What does the introduction of VantageScore 4.0 mean if I am getting a free VantageScore credit score through a website or mobile app?
The introduction of this new model will not immediately affect those consumers who use VantageScore credit scores for credit monitoring. In time, as providers of free scores adopt VantageScore 4.0, scores may shift. Keep in mind that this situation is still many months away, and before it occurs, the score provider should provide you with information to ensure a smooth transition.