The nation's three major consumer credit reporting agencies have announced they are creating a new credit scoring system, intended at making the loan process a lot easier for the lender and borrower.

"The main thing this does is demystify it for the consumer," Clark says. "The current system has been three different scores that didn't even mean the same thing." The new system changes that.

The announcement by Equifax, Experian and TransUnion said the new VantageScore was a result of market demand for a more consistent and objective approach to credit scoring.

In the past, the agencies each used their own formulas to create their own scores.

"Equifax uses one method of scoring you, Experian uses another and TransUnion uses a third, so having a score doesn't mean you have a score because they were completely different things," Clark says. "It would be like trying to count dollars, yen and Euros."

With the new system, a single methodology will be used to create the scores.

"It means that instead of having two of your three scores being things that are just from Mars, all three scores are going to be meaningful," Clark says.

The scores will range from 501 to 990. The top end is slightly higher than scores currently in use.

The new scores will be available immediately.