New to the credit score world is the VantageScore. VantageScore was created jointly by the three major credit bureaus to compete with FICO. It has some interesting aspects to be aware of:
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VantageScore range is from 500 to 1000 while FICO score range is from 350 to 850. So a Vantage score of 700 would be considered mediocre, while it is a prime FICO number.
- VantageScore algorithm and data points are exactly the same across the three bureaus. The only difference in score will be based on the data each bureau maintains.
- VantageScore is considered more predictive for “thin” files (i.e. credit files with less than 3 active tradelines.)
- Collections are also handled differently than with FICO - paying back an old collection will not re-date the collection as current and will not negatively impact a score.
- VantageScore is based on 6 main categories of credit information:
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Payment history (32%): Repayment behavior (satisfactory, delinquency, derogatory)
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Utilization (23%): Percentage of credit amount used/owed on accounts
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Balances (15%): Amount of recently reported balances (current and delinquent)
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Depth of credit (13%): Length of credit history and types of credit
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Recent credit (10%): Number of recently opened credit accounts and credit inquiries
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Available credit (7%): Amount of credit available
Wondering why your score suddenly jumped 100 points?
“I just bought my score at www.annualcreditreport.com and it was much higher than the score my lender got.”
Starting in mid-2007, when you purchase your score at www.annualcreditreport.com you are most likely purchasing a VantageScore and not a FICO score. The VantageScore is causing confusion among practitioners and clients who are purchasing their consumer education credit scores at www.annualcreditreport.com.
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