Credit scores about to become more forgiving under new VantageSc - KCTV5

Credit scores about to become more forgiving under new VantageScore model

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The way credit scores are calculated will change later this fall under the new "VantageScore" model. The way credit scores are calculated will change later this fall under the new "VantageScore" model.
KANSAS CITY, MO (KCTV) -

The way credit scores are calculated will change later this fall under the new "VantageScore" model.

Under this new model, VantageScore will be putting more weight on the "trends" of a person’s historical credit card usage. 

VantageScore is a credit scoring model developed by the three major credit reporting bureaus - TransUnion, Equifax and Experian. 

Under the new model, it will focus on whether the person has been paying off their credit cards or has been racking up more debt. 

Therefore, if you pay off your credit card each and every month and use less of your total credit, you will be in good shape under this new model. 

However, be careful about piling on more debt as you'll be labeled as risky. 

The changes will also address the issue of people who go out and use their credit cards to make a big purchase and receive a ding on their credit. Come fall, you won't see as big of a penalty as you have in the past. 

According to Credit Law Center CEO Bo Thomas, the best advice is to keep your credit cards as close to zero as you can or pay them off each month. 

"If you want to continue playing the credit card game, understand that the rules are changing a little bit so you're not going to want to leave as many open as you have in the past. Keep your good mix of credit. If you've got a mortgage to auto loans and three credit cards you're still going to be in pretty good shape. Can you do that and pay your cards off each and every month if you can and you're going to score the best,” Thomas said.

According to Thomas, people buying a home won't see their chances of being approved for a mortgage being higher under this new model.

That's because mortgage lenders rely on the FICO score, not VantageScore.

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