Credit Bureaus Joining Forces
The nation's top credit reporting agencies have joined forces to market a new product that promises more accurate returns for lenders.
VantageScore, created by TransUnion, Equifax and Experian, is a new system the companies created in a joint venture that could provide more consistency in consumer scoring across all three bureaus.
Prime and subprime lenders stand to benefit since the companies say high-risk consumers who are often approved may not be missed in the system while lower-risk consumers who are often denied an approval based on their rating will get a second chance.
Consumers who are high risk are put into a database, a benefit for subprime lenders looking to originate more loans.
Chet Wiermanski, vice president of analytics at TransUnion and one of the co-creators of VantageScore, said the system will cut the variance in the score between the bureaus by 30%. The score ranges from 501 to 990.
The companies began developing the system late last year. A team of about 25 people spent time researching and developing the product.
"Lenders are going to have to evaluate the new system," said Mr. Wiermanski.
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