Will Getting a Credit Report Lower My Credit Score

Why is My Vantage Score and Trans Risk Score Different?

Trans Risk Score is the proprietary scoring model supplied by Trans Union, one of the three major credit bureaus in the country. It is based on the traditional credit scoring methodology which gives weight to conventional credit factors in calculating the scores such as length of credit history, debts, payment history, number of recent credit inquiries, and credit usage.

On the other hand, Vantage Score is what has been dubbed by its creators as the next generation credit scoring model. Vantage score was created by the three major credit bureaus namely Equifax, Experian, and Trans Union in collaboration with each other in an attempt to come up with a consistent scoring model as well as to veer away from the use of old credit scoring models which gives more weight to credit history.

It is also an attempt by the 3 credit bureaus to develop an alternative method to the FICO scoring system which is widely used by banks and other lending institutions to assess the credit worthiness of consumers. FICO scoring was introduced in 1986 and immediately became the industry standard for objective credit scoring. The 3 CRBs have to pay a license to be able to use the FICO model. Unfortunately, the adoption of the FICO scoring system by the three credit bureaus resulted in 3 slightly different credit scores from the 3 major credit bureaus. This created widespread confusion among consumers and the 3 CRBs wanted to address the problem by offering Vantage Score.

The Big Difference between Trans Risk Score and Vantage Score

Will Getting a Credit Report Lower My Credit ScoreThe main difference between Trans Risk Score and Vantage Score is on which credit element each of them gives more weight to. Trans Risk is a traditional scoring model which gives more weight to the length of the credit history of the consumer while Vantage Score gives more weight on his most recent credit transactions than the length of the credit.

This alone creates a big disparity between the two scoring systems your credit score falls in different national percentiles with the two scoring models. Vantage Score is able to efficiently score more consumers than Trans Risk to include the upstarts with short credit histories.

Another difference between the two scoring models which often leads to confusion among consumers is the numerical ranges of their scores. And because they use different formula, even if applied to the same set of data, they will spew out two credit scores which are totally distinct from each other.

Trans Risk Score ranges from 300 to 850  with the 300 to 600 low range considered as high risk; 600 to 700 medium range as credible; 700 to 850 high range as highly credible.

Meanwhile, Vantage Score ranges from 501 to 990 and is divided into 5 divisions. The 501 to 600 low range is considered high risk and assigned the letter F; 601 to 700 is considered non-prime and assigned the letter D; 701 to 800 is considered prime and given the letter C; 801 to 900 is considered prime plus and assigned the letter A; finally 801 to 990 is considered super prime and assigned the letter A.

FAKO versus FICO

With so many credit scoring models available today, experts in this field have conveniently segregated them into two namely (1) the FICO or the credit scoring models that subscribes to and adheres to the FICO credit scoring models and (2) FAKO or the credit scoring models that uses a system other than FICO.

FICO remains to be the standard for credit scoring since most banks and lending institutions use them up to today. The FICO score is what matters most to consumers since it what the lenders refer to when they apply for a loan or a mortgage. In short, FAKO credit scoring models which include both the Trans Risk Score and Vantage score are at best misleading and unreliable for now.