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First, VantageScore is a credit scoring system that uses credit bureau information from the three major credit bureaus — Equifax, Experian and TransUnion — to evaluate consumer risk. A VantageScore credit score is a three-digit number between 300 and 850, with higher scores meaning lower risk for lenders, and better credit terms for consumers. With that said, here’s a look at the most frequently asked questions about this score.
VantageScore credit scores are accepted by the secondary ratings agencies, Fitch Ratings and Standard & Poor’s. Nearly one billion VantageScore credit scores were used last year by over 2,000 lenders and other industry participants, including 6 of the 10 largest banks. In fact, over 3 billion VantageScore credit scores were pulled in the last year, including scores used for decisioning, model building, and testing purposes.
First introduced in 2006, the VantageScore formula was developed jointly by the three major credit bureaus — Equifax, Experian and TransUnion — using a combined set of credit data obtained from each agency.
VantageScore calculations include trade lines (credit accounts), collections, public records and credit inquiries from your credit report, with an emphasis on your past two years of credit history. The formula excludes race, color, religion, nationality, sex, marital status, age, income, occupation, employer and where you live. The scoring factors most influencing VantageScore credit scores are:
Prior to the recent release of VantageScore 3.0, the score range was 501-990. VantageScore now uses a range of 300-850, making its scores more consistent with most other credit scores used by lenders. You can see your VantageScore 3.0, along with an Experian credit score and an easy-to-understand breakdown of the information in your credit report – all for free – using Credit.com’s Credit Report Card.
Some of the most notable features of VantageScore credit scores include:
A single scoring formula is used by all three credit bureaus when calculating your VantageScore credit score, yet your credit report is likely to be different at each bureau, resulting in different VantageScore credit scores obtained from Equifax, Experian and TransUnion.
By checking both your credit report and VantageScore credit scores from each of the three major credit bureaus on a regular basis, you’ll ensure the accuracy of your credit report, while getting a better understanding of your credit risk as seen through the eyes of lenders.
There is no single set of “good” or “bad” VantageScore credit scores, as each lender establishes its own unique set of score “cutoffs” based on the amount of acceptable risk for the different credit products they offer. For example, Lender A may require at least a 760 score for the lowest interest rate on a 30-year fixed rate mortgage, but only a 720 score for its lowest auto loan rate. Lender B, on the other hand, may offer the best mortgage rates to consumers having a 740 credit score, and the best auto loan rates to borrowers with a 700 score or above.
You can begin to raise a low score or maintain an already-high credit score by:
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