Thursday, May 18, 2017

Changes are Coming to Your Credit Scores

Introducing VantageScore 4.0
Billed as “Cutting-edge technological advancements to deliver unmatched credit scoring accuracy” 

Beginning September 24, 2016. Fannie Mae underwriting process required TRENDED CREDIT DATA to be reported on credit reports.This was designed to better understand Consumer Behavior and more accurately Predict Risk.  
Trended Data is only being used by Fannie Mae and now Freddie Mac to better define consumer risk on Mortgage Loans. Other lenders are NOT using this Trended Data to make credit decisions and Trended Data is not being scored in the FICO and VantageScore scoring models currently.

Changes are Coming
This may all change this fall!  VantageScore in releasing a new version in the Fall of 2017 named VantageScore 4.0, in an effort to get more lenders to use their scoring model instead of using the FICO scoring models, especially by the Mortgage Industries. This will be sold as a better, and more accurate risk model for ALL lenders. 
This is based on the analysis that consumers with balances on their credit cards who pay minimum payments or who pay more but with an increasing balance are 3 to 5 times riskier that Transactional borrowers who pay off the balances each month. A consumer with decreasing balance will fair somewhere in the middle. 
This will potentially affect an ability to get credit limit increases, and, will increase lender's profitability. It may make it harder to get loans or, approval for new credit if you carry hefty balances, especially if they show that the balances are increasing.

New Rules for Reporting and Scoring
  • May eliminate medical collections accounts, tax liens, and public records.
  • Penalizes unpaid medical collections less than other types of unpaid collections,
  • Ignores unpaid medical collections less than six months old
  • Paid collections (including paid medical collections) are excluded in the VantageScore 4.0 model
  • 4.0 model leveraged machine learning techniques to better score consumers with sparse credit histories (allow an additional 30 – 35 Million Consumers to have credit scores)

At Credit Scoring Advisor we are the experts, specializing in Rapid Credit Repair for our clients. Our founder, Daniel Sater is a Nationally Recognized Credit Expert, Author, Public Speaker, and Educator. In addition, Dan trains and Coaches numerous Credit Repair Companies across the country, he is a Certified C.E. Instructor for the Real Estate Industry for their continuing education credit. Mr. Sater is the Chairman of the Education Committee for NACSO – the trade association for the Credit Repair Industry.  His last book, "The Top 20 Toxic Credit Mistakes" is available on the Credit Scoring Advisor website and Amazon Kindle. He can be reached at 631-465-9565 or by e-mail at
Better Knowledge – Better Tactics –Better Results