FICO (Fair Isaac Company) and Vantage credit scoring method primarily differs with the way it is used and calculated by the 3 major credit bureaus (Equifax, Experian and TransUnion). Although both are a major factor in the issuance of credit reports, both scores are used by credit companies in determining whether to grant . . . → Read More: An in Depth Comparison of Your FICO and Vantage Credit Score]]>

fico vantage score

FICO (Fair Isaac Company) and Vantage credit scoring method primarily differs with the way it is used and calculated by the 3 major credit bureaus (Equifax, Experian and TransUnion). Although both are a major factor in the issuance of credit reports, both scores are used by credit companies in determining whether to grant or not to grant a loan to an aspiring applicant.

Vantage score, according to studies is preferred by majority of those in need of loans because they can have a better chance in getting high scores as compared to the FICO scoring method. The Vantage credit scoring method is actually created by the 3 major credit reporting companies. It uses analytical techniques that give possible loan applicants high, predictive and consistent credit scores using a 24 month basis of collective experience from the consumer to be scored.

Another thing that has made the Vantage credit score popular is the fact that it returns score ranging from 501 as its lowest and 990 to be its highest. On the other hand, FICO’s method of calculating only has 850 to be its highest available score card as compared to Vantage scoring method. FICO also makes use of 5 variables (payment history, length of credit, new credits, amounts owed and types of credit used) while on the other hand, Vantage is based on payment history, depth of credit, recent credit, available credit, balance and utilization.

While we can say that indeed, FICO scoring method is old school, you should always be reminded that it is as important as any other data found in one’s credit report. There is still more than a few credit companies that prefer A FICO over Vantage because it has been their reference for years. Like they say, old habits are hard to forget.

Vantage scoring method was actually created by the 3 credit reporting companies with the aim to simplify the credit process and give consumers an advantage in scoring. Equifax, Experian and TrnasUnion is said to have joined their forces together to create a model and modern credit scoring method that will provide consumers with greater scores that remains consistent throughout the span of 12 months.

There are also things common to both scoring methods. Both are accessible to the 3 major credit reporting companies. Both can also be found in one’s annual credit report that is being studied not just by credit companies but by future employers as well. A credit score is seen to be the basis of how a person handles his finances, his reliability (if he can’t handle his money matters, how can he be trusted with a company?) and his capability to organize things.

We can clearly see here that a credit score is more than just a 3-digit set of number. It is a determiner in one’s personality and a basis of future transactions whether with employers or with credit companies. Early on, it is but advisable to keep a clean record and even if at present, you are not in need of any kind of loan. There will always be a time you will need one and all you can rely on is a good credit score.

You have probably heard the term ‘credit score’, but are you aware there are two major types? Here we will review the major differences between the FICO Beacon score and the Vantage score. Understanding how these work will improve your chances of building a solid history of paying on time.

The typical FICO rating will . . . → Read More: Fico Beacon Score Vs Vantage Credit Score]]>

FICO VantageScore

You have probably heard the term ‘credit score’, but are you aware there are two major types? Here we will review the major differences between the FICO Beacon score and the Vantage score. Understanding how these work will improve your chances of building a solid history of paying on time.

The typical FICO rating will range from 300-850, with 850 being excellent rating. Typically, a measurement of 620 is the dividing line between prime credit (lower interest rates) and sub-prime (much higher rates). With this in mind it is easy to see how maintaining as high a measurment score can save you a considerable amount of money in the long run.

To determine the differences between a FICO score and a Vantage let us look at how the FICO score is calculated. Typically it is calculated as follows:

• 35% based on payment history. More weight is applied to recent payments as compared to past payments.
• 30% based upon the amount of debt you are carrying.
• 15% based upon length of payment history. The longer the better.
• 10% based upon recent inquiries. The fewer the better.
• 10% based upon your credit mix. The more diversified (mortgage, car loan, cards, etc) the better.

The Vantage  was developed by the three major credit-reporting agencies as a better representation of one’s creditworthiness. While the FICO score remains the most popular, the Vantage is catching on. These scores runs on a scale of 501-990 and issues a letter grade to the measurment. Let us look at the components of the Vantage to see how it differs from the FICO.

• 32% based upon payment history. Similar weighting as FICO.
• 23% based upon total credit available.
• 15% based upon the portion of your score contributed by your outstanding balances.
• 13% based upon the kinds of credit held and how long you have held them.
• 10% based upon the number of recently opened accounts and number of recent queries.
• 7% based upon the total dollar amounts you could potentially use.

The FICO Beacon score was once synonymous with the term ‘credit score’, but the Vantage score seems to be gaining ground. As shown above there are differences between how the FICO score and the Vantage score are calculated. Understanding how each score is calculated can help you make better credit decisions to maintain an excellent credit rating