In the United States, the credit industry has two major scoring models: FICO® -the industry leader- and VantageScore®. Vantage Score was created by the three major credit reporting agencies back in 2006, but it’s started gaining in impact. These two scoring models use different criteria to come up with your credit score. Let’s look at the differences between VantageScore and FICO.
VantageScore and FICO® credit scores give varying levels of importance to different things. Both try to predict how likely a person is to pay back their debt, but they are slightly different. VantageScore uses one three-bureau model to use with a credit report from any of the three major agencies: Experian, Equifax or TransUnion. FICO, on the other hand, uses scoring models specific to each agency. Technically, a person’s FICO score will vary slightly for each of the major agencies.
FICO needs you to have a credit account that is at least 6 months old and have activity during the previous six months before. A person is scorable by VantageScore if there is even one account in the credit history, even if that account is younger than six months old. FICO scores range between 300 and 850, though their industry-specific scores vary between 250 and 900. The most recent VantageScore use the 300 to 850 range as well. For the most recent FICO score to be considered good, you will want a score of at least 670. For the most recent VantageScore, you will want a score of at least 700.
The new VantageScore looks at whether you usually only make minimum payments, but the most recent FICO scoring method doesn’t. The most recent FICO method ignores paid collection accounts and devalues unpaid medical bills it also ignores collections accounts if the balance that wasn’t paid was under $100. The latest VantageScore method doesn’t exempt low-balance collections, but it does ignore paid collections accounts and it does devalue medical collections bills.
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