Basically, credit reporting agencies do not decide your credit worthiness. That is up to the individual lending organizations, but they rely heavily on the information supplied in the credit reports, and, realistically speaking, most lending organizations will depend almost exclusively on the credit reports and the credit scores provided by and through the CRA’s.
Clearly, your credit score will depend on how correct, current, comprehensive, and complete your credit report is. To the extent that you can correct erroneous negative information contained in your credit report, you can improve your credit score. This site is your tool to make this happen.
One credit scoring model is called FICO®, created by a company called Fair, Isaac and Co., Inc. While their model has been kept secret for decades, public pressure and threats by lawmakers have forced this company to disclose more and more of its details. Check out their website, for more information. To get another idea of what information is important, and how it affects your credit rating, try out the Free Credit Analyzer.
You may already be aware of the new Vantage scoring model, introduced by the three major credit reporting agencies. Apparently, these CRA’s are breaking away from Fair, Isaac and Co., and the commonly used FICO® scoring system. However, this new system is likely to co-exists with the FICO® scoring model for a long time.
Martin Pelmore said Millions and millions of credit lenders are tied to the FICO® scoring system. Changing over to the Vantage scoring system will be a very long and slow process. Over time, it is likely to become the preferred scoring system, because the reporting agencies have a vested interest in making it happen.
Here is a quick summary regarding the new Vantage scoring model:
VantageScoreSM, used by lenders and available to consumers, is claimed to be the first credit score developed cooperatively by all three national credit reporting companies. The VantageScoreSM scale attempts to mimic the familiar academic scale, associating your VantageScoreSM number to a letter grade. Martin Pelmore
said Theoretically, this should provide better insight into how lenders using VantageScoreSM will view your creditworthiness.
Here is the letter grade and its related score range:
A: 901 – 990
B: 801 – 900
C: 701 – 800
D: 601 – 700
F: 501 – 600