In the complex landscape of credit scores, vantage score has emerged as a key player. Understanding what the vantage score is and its implications can be crucial in navigating the financial realm. Let us embark on a journey to demystify the concept and explore why vantage score is not available in India.
What is vantage score?
Vantage score is a credit scoring model introduced in 2006 by the three major credit bureaus in the United States – Equifax, Experian, and TransUnion. Unlike traditional credit scoring models, vantage score employs a different methodology to assess an individual's creditworthiness.
The scoring range for the vantage score is from 300 to 850, with higher scores indicating better creditworthiness. It takes into account various factors, including payment history, credit utilisation, types of credit used, and recent credit behaviour. The goal is to provide a more accurate and holistic representation of an individual's credit risk.
One of the distinguishing features of vantage score is its ability to consider a wider range of credit data. This inclusivity aims to provide a fair evaluation of individuals with limited credit history, benefiting those who may not have an extensive borrowing background.
Additionally, vantage score claims to adapt swiftly to changes in consumer behaviour and lending practices, ensuring a more dynamic and responsive credit scoring model.
Why is the vantage score not available in India?
Despite its prevalence in the United States, vantage score is not available in India. The credit scoring landscape in India primarily relies on different models, such as the CIBIL Score, which is provided by the Credit Information Bureau (India) Limited.
The absence of vantage score in India can be attributed to the distinct credit reporting systems and regulatory frameworks in different countries. Each nation has its own set of credit bureaus, scoring models, and data reporting practices, making it challenging for a single model to be universally adopted.
In conclusion, the vantage score offers a unique perspective on creditworthiness, providing a more inclusive and dynamic assessment. While it has become a staple in the United States, its absence in India highlights the diversity in credit scoring practices globally. Understanding the significance of credit scores, whether vantage or others, empowers individuals to make informed financial decisions and build a secure financial future.
As you navigate the world of credit, remember that knowledge is your greatest asset. Stay informed, monitor your credit score regularly, and take proactive steps to enhance your financial well-being. The journey to financial empowerment begins with understanding the tools at your disposal.
