In the United States, the credit scoring industry is dominated by FICO and three credit reporting agencies, Experian, Equifax and TransUnion. FICO and each of the credit reporting agencies have created their own unique risk models to evaluate a customer's creditworthiness, and ultimately generate a credit score.

While FICO credit scores were the most widely used credit score historically, in 2006 the three credit reporting agencies worked together to develop a new model and credit score called VantageScore. VantageScore 3.0 is the latest version of this model and is used by 20 of the top 25 lenders in the United States. It's one of the most popular credit scores on the market for both lenders and consumers and is the only tri-bureau score.

How does VantageScore 3.0 work?

Similar to other credit scores, VantageScore 3.0 uses the information in your credit report to generate a score that lenders use to predict your likelihood of repaying debts on time. VantageScore 3.0 scores range from 300 to 850 and weighs each of the below factors from your credit report. The percentage for each factor represents how important it is in calculating your VantageScore:

How is VantageScore 3.0 different from FICO®?

Although FICO and VantageScore 3.0 consider many of the same factors and use the same rating scale (300 - 850), they differ slightly.

For example, while both scores use payment history is the most influential factor, FICO scores only look at payment history on loans and credit. VantageScore 3.0 also views your total balances and debt as less influential than FICO. Below is a summary of the factors used in each score and how influential they are in determining your score:

VantageScore 3.0:

  • Most influential: Payment history
  • Highly influential: Age and type of credit, percent of credit limit used
  • Moderately influential: Total balances and debt
  • Less influential: Recent credit behavior and inquiries, available credit

FICO:

  • Most influential: Payment history on loans and credit cards
  • Highly influential: Total debt and amounts owed
  • Moderately influential: Length of credit history
  • Less influential: New credit and credit mix (the types of accounts you have)

You can read more about VantageScore 3.0 and each of the credit factors it uses here.

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