Providing A Personal Credit Score Computed Using Vanguard Scoring System

jaschmidt | Dec 16, 2009 |

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The credit score TransUnion before were similar to those generated by other credit bureaus like Equifax and Experian. The credit report coming from these major credit bureaus are the basis used by financial institutions in granting of credit and FICO in tabulating credit scores.

In recent years, TransUnion has been generating another credit score computed by Vantage Score, the latter being a new entity in the business of computing credit scores. However, TransUnion continues to provide credit score generated by FICO since it is the standard score being used by most financial institutions.

The credit score TransUnion is described as a TransUnion personal credit score and is several ways different from that of FICO credit score. For one, in as much as TransUnion constantly updates their credit records, a personal credit score TransUnion generates, may vary from day to day. Other differences in a credit score computed using the Vanguard credit scoring formula are as follows:

1. Whereas FICO uses the numbers 300 to 850, TransUnion uses 501 to 990. This automatically generates scores higher than those released by FICO. Roughly estimated, a FICO credit score of 700 is equivalent to a credit score TransUnion will place at around 916 which borders to an equivalent A grade

2. A TransUnion personal credit score computed using the Vanguard scoring system also assigns a grade for every number bracket. The highest being A which is equivalent to the bracket of 901-990 and the lowest is F which is for numbers ranging from 501 to 600. Although favorable at a glance, an average FICO score of 700 is equivalent to a high grade A as it falls under the 901-990 bracket, the low FICO score of 300 remains low in a personal credit score TransUnion provides, which is around 501-600 with the F grade being the lowest.

3. A personal credit score TransUnion computes using Vanguard scoring system makes use of six factors as opposed to FICO's five factors. The sixth additional factor that TransUnion takes into consideration is the Available Credit which is not a consideration in a FICO tabulated score.

4. The percentages in a personal credit score TransUnion provides are as follows: Payment history- 32% against FICO's 35%, Utilization – 27% against FICO's 15%; Balances- 15 % against FICO's 30%; Depth of Credit- 13% against FICO's 10%; Recent/New Credit 10% which is the same as FICO's also at 10% and the last factor Available Credit- 7% which FICO does not include.

TransUnion Background

As a backgrounder, TransUnion has been in the business of gathering, analyzing and delivering information needed by businesses and consumers in building a stable economic condition for more than thirty years now. This is to allow financial institutions to manage the risks involved in their business in the form of credit score. The credit score TransUnion provides is currently strategically located in five continents serving over fifty thousand consumers in twenty five countries.

To date, the credit score TransUnion releases is used by more than five hundred million clients worldwide. Although we have to take into consideration that TransUnion releases two kinds of credit scores, one is a FICO tabulated score based on the data gathered by TransUnion and another one called personal credit score generated using the Vanguard scoring system.
The credit score TransUnion releases can provide security against identity theft and credit monitoring to borrowers and financial institutions. In addition, financial institutions, also makes use of the credit score TransUnion in analyzing marketing services which include planning and development.

Being in the business of giving credit score, TransUnion make it a point to preserve the credit histories of more than five hundred million consumers. Because of this, the credit file becomes available to the requesting business unit in a span of minutes instead of days or weeks.

However, the credit score TransUnion is given only to those with "permissible purpose" as allowed under the Federal Fair Credit Reporting Act (FCRA). Hence, to protect the confidentiality of information in the credit score TransUnion, it is limited only to legitimate subscribers with permissible purposes. It is also important that to become a registered user, you must have a dedicated private line used only for communication. A standard procedure is the use of secured passwords to access entry to the credit file.