(10/20/2010) Erate.com Exclusive - When TransUnion recently examined its
data base for credit scores, a greater share of consumers in the
Minneapolis, MN and Silicon Valley, CA areas had high scores, a larger share
of consumers in two Florida metros had the worst.
For the first time, TransUnion, one of three major credit bureaus, ranked
scores on an "A" (for excellent) to "F" (for failed) scale for Metropolitan
Statistical Areas (MSAs) using its VantageScore credit scoring model.
Credit scores are a numerical rendition of a consumers credit worthiness.
They are virtually always examined when you apply for a mortgage, credit card or other form of
credit as well as insurance.
TransUnion's VantageScore credit scores range from 501 to 990, with
higher scores representing a lower likelihood of risk for the lender and,
for the consumer, a better shot at credit.
VantageScore scores of 901 or more earn an A; scores of 900-801 get a B;
800-701, C; 700-601, D; and 600-501, F.
FICO credit scores, another scoring system, uses
numerical scores only ranging from 350 to 850.
"Because lenders have so many scoring
models at their disposal, it's rare when the credit score they receive
for a consumer and the score the consumer obtains for himself actually
match, and that causes a lot of confusion," said Heather Battison, director
of education for TransUnion consumer products.
"That's why the A-F, academic-style letter grade that comes with every
VantageScore consumers obtain at TransUnion.com is so beneficial. If my
grade is an 'A', I innately understand that means a lender is likely to view
my creditworthiness in a very positive light; and that's primarily what I
want to know," Battison said.
Using VantageScore, metro areas at the top of the class with consumers
earning the most As were:
• Minneapolis-St. Paul-Bloomington, MN-WI - 23.5 percent.
• San Jose-Sunnyvale-Santa Clara, CA - 23.5 percent.
• San Francisco-Oakland-Fremont, CA - 22.9 percent.
• Washington-Arlington-Alexandria, DC-VA - 22.4 percent.
• Seattle-Tacoma-Bellevue, WA - 21.6 percent.
• Study your situation. Proactively manage your credit and risk for
identity theft with an ongoing credit monitoring. You can accomplish this by
regularly obtaining your credit report at AnnualCreditReport.com. Examine your report for
activity, errors and omissions that you can change, correct or adjust.
• Don't be late. Pay on time. A history of late payments can lower
your credit score.
• Manage your debts. Keeping high balances relative to credit limits
on key credit accounts can have a negative impact on a score. Pay down
debt. Keep balances at or below 30 percent of your total available
credit to present the best possible financial image to lenders. Set budget
goals and, whenever possible, use cash to lessen dependence on credit.
• Give yourself time. Long-term credit
relationships and a diverse mix of credit accounts help boost your score.
Avoid closing credit cards and other accounts that have been paid on time
over a long period, as it can make your credit history appear shorter and
could affect your score.
• Limit inquiries. Each time you apply for a new credit card, an
inquiry will appear on your credit report. Frequent credit card inquiries
can make it look like you have a cash flow problem and that can lower your
score. However, when you shop for mortgage or auto loan rates over a two to
three week period, credit scoring models typically factor the resulting
inquiries together as a single item. This lets you to shop for good loan
rates with little impact on your credit score.
