A Closer Look at Credit Scores
In its simplest form, a credit score is a number that helps lenders ascertain the likelihood of you making your payments on time. The score and or scores are a summary of risk, and the higher the scores, the lower the risk, according to banks and lenders. The actual score is a three-digit number that can range from 300-850, depending upon the agency providing the information in your credit report, with 850 being nearly perfect credit.
There are three credit-reporting agencies in the United States: TransUnion, Experian and Equifax. Each agency calculates your score based on a scoring model developed by the Fair Isaac Corporation, which includes information creditors send to the credit reporting agencies. The information contains your past and current payment histories, account balances, active or inactive accounts, how long you have had credit and other related information. The agencies will then issue you a score, commonly referred to as a FICO score, based on all the information gathered in each report. An example might be an agency issuing you a lower score based on a consistent pattern of late monthly payments according to information from your creditors.
Vantage Scores vs. FICO Scores …show more content…
However, Vantage scores are starting to take a more predominant role in credit scoring. Vantage scores are the brainchild of the three agencies, TransUnion, Experian and Equifax. The agencies developed the scoring model as an alternative to the perceived monopoly held by the Fair Isaac Corporation and FICO scores. The agencies developed vantage scores in 2006 and are a great tool for you to use to track your score over time. Do keep in mind that FICO scores are the only model used to assess risk for home mortgages by the government-backed mortgage agencies Fannie Mae and Freddie
In its simplest form, a credit score is a number that helps lenders ascertain the likelihood of you making your payments on time. The score and or scores are a summary of risk, and the higher the scores, the lower the risk, according to banks and lenders. The actual score is a three-digit number that can range from 300-850, depending upon the agency providing the information in your credit report, with 850 being nearly perfect credit.
There are three credit-reporting agencies in the United States: TransUnion, Experian and Equifax. Each agency calculates your score based on a scoring model developed by the Fair Isaac Corporation, which includes information creditors send to the credit reporting agencies. The information contains your past and current payment histories, account balances, active or inactive accounts, how long you have had credit and other related information. The agencies will then issue you a score, commonly referred to as a FICO score, based on all the information gathered in each report. An example might be an agency issuing you a lower score based on a consistent pattern of late monthly payments according to information from your creditors.
Vantage Scores vs. FICO Scores …show more content…
However, Vantage scores are starting to take a more predominant role in credit scoring. Vantage scores are the brainchild of the three agencies, TransUnion, Experian and Equifax. The agencies developed the scoring model as an alternative to the perceived monopoly held by the Fair Isaac Corporation and FICO scores. The agencies developed vantage scores in 2006 and are a great tool for you to use to track your score over time. Do keep in mind that FICO scores are the only model used to assess risk for home mortgages by the government-backed mortgage agencies Fannie Mae and Freddie