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 Member Update
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which is an independent credit scoring company that gets its information from the bureaus to generate a risk score, VantageScore cuts out the middleman by directly sourcing from the bureaus’ data. According to credit rating bureau, Experian, and VantageScore, these are some notable benefits to using VantageScore credit scores:
• Millions of more applicants have a credit score: VantageScore can provide a score to 30-35 million adults who would have otherwise been virtually credit invisible (we call these consumers, “credit thin”). Those with “credit thin” files like college students or high-school graduates, typically just do not have enough credit information to meet the minimum scoring requirements. For FICO, consumers must have a credit account (also known as “tradeline”) that’s at least 6 months old and has had activity within the 6 months. With VantageScore, applicants can be scored so long as they have one tradeline account, even if it is less than 6 months old. This increases the chance your applicants’ report will come back with a credit score.
• All three bureaus receive the same report: Regardless of whether your resident screening service receives their credit reports from Experian, Equifax, or TransUnion, the VantageScore credit report will be the same. Meaning no confusion for your applicants. FICO – on the other hand – creates bureau- specific scoring models, which means scores could even vary based on who you get the report from.
“WHAT ELSE IS ON THE CREDIT REPORT?”
When choosing a resident screening service that offers FICO or VantageScore, keep in mind that the credit scoring model only affects the credit score. The rest of the credit report will show the applicant’s credit information, like:
• A summary of their positive and negative credit accounts (also known as “tradelines”)
• Their total estimated past due and monthly debts
• A breakdown of their accounts
• Payment history
• Any prior credit inquiries and when the inquiry was made
“WILL CREDIT SCORES BE AFFECTED BY COVID-19?”
Every person’s credit situation is different and each model ranks certain financial situations (like nonpayment due to a pandemic) differently, so there is no definite yes or no answer. However, under the Coronavirus Aid, Relief and Economic Security (CARES) Act, lenders that report financial data to the credit bureaus will not cause consumer credit scores to go down. VantageScore is also adjusting their models to minimize the negative impacts used with forbearance and deferment codes for loans. The three credit bureaus have also made consumer credit reports (without credit scores) available for free, weekly for a year.
At the end of the day, it is all about what you want for your rental properties. Credit reports are the cornerstone of resident screening and choosing which credit scoring model to champion can make a difference when leasing. Will you choose the more recognized FICO score? Or, will you go with VantageScore, which can score more rental applicants? Thankfully, the Apartment Association of Greater Los Angeles, through CIC, offers both VantageScore and FICO so you are always in control of your rental property’s important leasing decisions.
     Becky Bower is a marketer and writer that specializes in legislative trends. As Contemporary Information Corporation (CIC)’s Content Specialist, she authors in-depth guides on how to manage, grow, and scale within the rental housing industry on the CIC Blog. CIC is a preferred tenant screening service provider for the Apartment Association of Greater Los Angeles. For more information, go to https://aagla.org/cic-apply-connect.
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