VantageScore is releasing their newest scoring model;

VantageScore 4.0 in fall of 2017.

This 4th generation of VantageScore’s scoring model will have a bit more information for lenders to determine if a consumer is a credit risk. VantageScore is introducing a new factor into a consumers overall credit score as an attempt to overstep FICO and take reigns of the lender purchased credit scoring market, and it’s becoming a bit more noticed.

Why is this important? Because it can affect a consumer’s over all credit score, most specifically (and negatively) the ones who tend to carry high balances on their credit cards each month. The new scoring model of VantageScore has formulated trended data into their calculation, and will include more then just a utilization ratio.

Previous scoring models for both VantageScore and FICO have only calculated your current credit card utilization ratio at the time of the report. The previous models only used a snapshot of your current ratio, meaning if you had high balances, you would have low scores. and vice versa. However, in the new model, it will not just be a snapshot of your current ratio, but rather how well you have been able to keep and maintain balances ratio and for how long. Trended data was included on consumers credit reports several years ago (FICO & VantageScore), having credit issuers report a 24 month payment and balance history to the three major bureaus Equifax, Experian, and TransUnion in a part of calculating a consumers risk factor.

VantageScore 4.0 gives lenders the ability to seek further into a consumers balance history and how well they have been able to maintain it. So if you typically carry a high balance on your credit cards, and make only the minimum payment each month, VantageScore 4.0 may not give you the benefit of the doubt. This new 4.0 model is supposed to reliably increase the predictability of credit risk by a consumer compared to the previous score models VantageScore has released, and lenders are interested.