Credit Bureaus Adopt New Credit Scoring System

The three major consumer credit bureaus in the U.S. have recently created a new credit scoring system that will give financial institutions a more consistent evaluation of the credit worthiness of applicants.

The three agencies — Equifax, Experian and Transunion — have introduced the new system called “VantageScore”. The new scoring system will be used immediately for reporting to banks, lenders, and credit card companies, and will be available to consumers later in the year.

This means that instead of the companies providing three different sets of evaluations — often quite different — there will be much less variation within an applicant’s file. All three companies will be using the same formulas to arrive at their credit evaluations.

A spokesperson for the group said scores will be “virtually the same across all three of the national reporting companies.”

But consumer advocacy groups are not impressed with the new system. Since one of the biggest problems with credit scoring — outdated information — will not be addressed by these changes. The new system will still be working with...