Why Is A VantageScore Important?
The new VantageScore is a direct product of the collaboration between the three major credit reporting agencies: Experian, Equifax, and TransUnion. In March of 2006, these companies unveiled a new, unified credit scoring system that they hope will eventually replace the traditional FICO system. Before VantageScore, each credit bureau used different proprietary methods for determining credit scores, which often resulted in quite a divergence among the three.

VantageScore is based on a number and letter based framework. This means that whereas old FICO scores were rated from 350-850, VantageScore's will range from 501-990. In addition, each number range will be accompanied by a letter grade, as follows. A score of 901-990 = A, 801-900 = B, 701-800 = C, 601-700 = D, 501-600 = F.

Critics of the system believe it may be too vague, simply lumping people in a letter category without taking into account how close they may be to the next level up. For example, if you have a letter score of "C," but your number score is actually 798, you are in theory much more of a "B." However, it remains to be seen how closely lending institutions will look at both figures and whether or not they even choose to adopt this system in total at all.

A VantageScore supposedly gives more credibility to the system of measurement. The ways in which your score is determined are the same across the board, so theoretically there should be less room for error. In a best-case scenario, this means that your credit score could improve slightly.