When most people talk about credit scores, they're referring to the FICO score, the brand most-used by lenders. But, that's not the only credit score out there. The VantageScore was launched by the three major credit bureaus – Equifax, Experian, and TransUnion - in March 2006.
The credit bureaus came up with the VantageScore so that consumer credit scores would be consistent among all three credit bureaus. Prior to the VantageScore, each of the credit bureaus used their own credit scoring model which led to differences in credit scores even for the same credit report.
A VantageScore ranges from 501 to 990 with higher scores being better. VantageScore assigns a letter grade to each consumer’s credit score. The letter grade takes the guesswork out of figuring out what’s a good credit score.
- 901 – 990 = A, Super Prime, 11% of consumers are Super Prime.
- 801 – 900 = B, Prime Plus, 29%
- 701 – 800 = C, Prime, 21%
- 601 – 700 = D, Non-Prime, 20%
- 501 – 600 = F, High Risk, 19%
According to Experian, the average VantageScore is a 736, which is a C.
The VantageScore is calculated based on the information in your credit report, but the most recent 24-months of credit history have the most significant impact on a VantageScore.
The VantageScore is based on six different pieces of information. The scoring calculation has been updated to give more weight to recent credit and less weight toward your current balances, depth of credit, and available credit.
- 28% - Payment history – whether your payments are satisfactory, delinquent, or derogatory
- 23% - Utilization – the amount of credit you’ve used
- 9% - Balances – the amount of recently reported current and delinquent balances
- 8% - Depth of credit – the length of your credit history and types of accounts you have
- 30% - Recent credit – the number of recently opened credit accounts and credit inquiries
- 1% - Available credit – the amount of available credit on your credit card accounts
Authorized-user credit cards are not included in the VantageScore.
VantageScore vs. FICO Score
The VantageScore formula is similar to the FICO score five-factor formula (payment history, level of debt, age of credit history, type of accounts, inquiries), but the categories are split up differently: age of credit history and type of accounts are included in VantageScore’s depth of credit (15% vs. 13%).
In addition to credit utilization (30% of your FICO score), the VantageScore also considers credit card and loan balances and available credit (10% of the Vantage Score).
Your VantageScore will continue to vary from one credit bureau to the next since the information in your credit reports is different.
Credit Inquiries and VantageScore
You can check your VantageScore without having your credit score drop since this type of credit report inquiry doesn’t affect your credit. Your VantageScore is impacted by inquiries that result from your application for a loan, credit card, or other service.
Purchasing a Vantage Score
You can purchase your Vantage Score from Experian for $7.95. You can get a free version of the VantageScore, in addition to your TransUnion credit score and Auto Insurance Score, from CreditKarma.com.