Know the Score: Vantage vs FICO

VantageScore 3.0 is here and TenantTracks uses this scoring model. Here is how it will impact the industry.

Currently, the FICO score is known as the dominant credit score used by lenders, but this will soon change. Vantage 3.0 is being touted as a better model featuring improved predictability with up to 25% greater accuracy for its users. The new score mirrors the current FICO credit score range somewhat but starts at 500 and ends at 900 which is different than the FICO range of 350 to 850, but several important changes make the VantageScore 3.0 a possible game-changer in the market.

Gerri Detweiler, Credit.com's Director of Consumer Education, takes an in-depth look at the three major changes that VantageScore has made to create VantageScore 3.0, and what that might mean for consumers.

One of VantageScore 3.0′s biggest changes is how the scoring model treats collection accounts. These accounts, which occur when a lender or a business reports that a debt has not been paid and has been sent to a collection agency, have previously been treated as a very bad sign on credit reports. However, the new VantageScore model does not fault consumers if they have paid off a collection account.

This change is a game changer, especially for consumers who have been hurt by unexpected medical debts. As Gerri has previously reported, Credit.com receives many questions from consumers who have had a medical bill for, for example, a copay they didn't know about or a doctor's bill they never received, sent to collections. That one missed bill would affect their credit score for years. Once that bill is paid, the VantageScore 3.0 won't penalize consumers for it.