VantageScore is a new credit scoring system created by the three major credit bureaus to contend with the well-known FICO score. These three bureaus, Equifax, Experian, and TransUnion, are ordinarily competitors but have worked together on VantageScore to create what they believe to be a better and more consistent scoring system.
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VantageScore Compared to FICO
The two scoring systems have some similarities. A late payment under either system will hurt your credit score while efforts to pay bills on time and pay down debts will help to improve scores. Both VantageScore and FICO utilize the information found in your credit report to determine your credit score. A certain percentage of your score is based on different factors of your credit report. However, the two scoring systems weight the factors differently. FICO determines 25% of your score based on the length of your credit history and the types of credit you have, while VantageScore weights those factors at 13% of your score. The amount of credit you have and the way it is being used contributes to 45% of your total VantageScore. Those factors only make up 30% of your FICO score. Because these factors are weighted differently, various actions you take concerning your credit will affect your two scores in different ways. Another difference between the two scoring systems lies with the scoring scales. While the standard FICO scale ranges scores between 300 and 850, the VantageScore scale ranges from 501 to 990. Those numbers are divided into five levels of credit:
901-990 = A Credit
801-900 = B Credit
701-800 = C Credit
601-700 = D Credit
501-600 = E Credit
You can learn for yourself what your VantageScore is and what level of credit you currently have by checking with any of the three credit bureaus. In reference to the way the new VantageScore is contending, it is still too early to see how much of a challenger to FICO it will become in the future.