Golden 1 Credit Union:
Golden 1 is a credit union headquartered in Sacramento, California. It functions with an objective to meet the needs of their members and are non-for-profit institutions unlike the banks which are for-profit institutions. Founded in 1933 as California State Employees Credit Union, it changed its name to Golden 1 in 1977 with an aim to improve the financial well-being of their members. Being a local and community-based institution, it provides more personalised customer services like Mobile and Online Banking, Mobile Deposit, Debit Card, and more. It believes in advancing and strengthening the community both at workplace and in cities to live better lives and thus gives back through donations, scholarships, sponsorships, events, and disaster relief.This article is about,What credit bureau does golden 1 use?
What credit bureau does golden 1 use?
Credit Bureaus:
The credit profile for any lending institutions (Credit Union, Banks, and other financial institutions of such kind) is taken from the credit reporting agencies, which are also known as Credit Bureaus. There are three major Credit Bureaus in United States of America namely –
- Experian,
- Equifax, and
- TransUnion.
Credit bureaus are the institutions which make money by typically collecting the data and selling it for both individuals i.e., consumers and for businesses.
Purpose of Credit Bureaus:
- The primary purpose of the Credit Bureaus is to provide its clients with information necessary to make a calculated decision on whether to lend money or offer services to person or business.
- They also provide secondary service which is Identity checking and verification.
In many countries, credit bureaus can collect social security numbers, electoral roll information, driver’s license numbers, property purchase records, court data and business records. However, it is noteworthy to have a clear idea that Credit Bureaus don’t make any lending decisions, but plays a major role to assist the lenders in their decision-making process by providing them with the credit score information, which serves as a gate-keeper to process a full credit application.
Credit Bureau used by Golden 1:
Golden 1 Credit Union grabs its credit profile from TransUnion, which is one of the three major credit reporting bureaus. The credit scores recorded by the reporting agencies differ from one another as they use different scoring models to arrive at the credit score for each applicant each time a lender performs a credit search. Nevertheless, all the three Credit Bureaus hold great importance despite the distinct score models used. TransUnion notes down more specific information unlike Equifax and Experian which considers brief details for making credit reports.
The Score Model followed by TransUnion Credit Bureau:
It uses the VantageScore 3.0 model to calculate the risk score (credit score) and derive the annual credit reports. VantageScore 3.0 model is one of the many credit scoring models used by the financial organisations, which was founded in the year 2006 by three major credit bureaus – TransUnion, Equifax and Experian. The main purpose to create VantageScore model is to compete with the popular FICO models while also expanding credit scoring reach.
Over the years, the VantageScore model has been upgraded multiple times, with four separate models launched:
- VantageScore 1.0 in 2006
- VantageScore 2.0 in 2010
- VantageScore 3.0 in 2013
- VantageScore 4.0 in 2017
Despite the latest update of the score model to VantageScore 4.0, many creditors and individuals including Golden 1 still use the 3.0 model.
The criteria weightage of VantageScore Model:
The Bureau never reveals the exact mathematics used to calculate the credit score as they make money from it. However, VantageScore is fairly transparent about the criteria which it uses for the credit scores. It allocates different weightage for various criteria involved in the calculation and hence influences the score in the following manner:
- Credit Utilization: It is the amount of credit the individual has used compared with the credit that has been extended by a lender. According to the VantageScore, this criterion is a fairly influential criteria for calculating the credit score.
- Credit Mix and Experience: It provides information about whether the individual has an experience in handling various kinds of credit accounts that form the overall credit report. This has a significant influence on the credit score. VantageScore says that this is highly influential.
- Payment History: This gives a precise information on whether the individual pays the bills on time. This plays an important role for calculating the risk score and hence, VantageScore says this as extremely influential.
- Age of credit: Age of history records the number of years passed since the opening of the first credit account and is considered as the average number of years of holding a credit account. This is rated as less influential in calculating the VantageScore.
- New accounts opened: This gives an information about how often the consumer is applying for and opening new accounts. VantageScore says this is less influential.
Criteria which are not included in VantageScore:
Apart from the criteria which is included in the calculation, VantageScore also lists things which are not included or which doesn’t factor in the score. They include the factors such as the demographics, the place of living, how much the consumer makes and the total assets.
VantageScore Rating:
Based on all these factors, VantageScore model runs from 300 to 850. And anything between 661 and 780 is a good credit score according to the VantageScore. The credit score break down and the credit performance is marked accordingly as follows:
- Very Poor: 300 to 499
- Poor: 500 to 600
- Fair: 601 to 660
- Good: 661 to 780
- Excellent: 781 to 850
Conclusion:
Golden 1 is a caring and trusted community partner, working to increase the educational opportunities, strengthen financial well-being, and make communities great. It values diversity, integrity, respect and extends its service by using TransUnion Credit Bureau, VantageScore 3.0 for the annual grant programs.
