Overview

Most credit scores – including the FICO® score and VantageScore® 3.0 – operate within the range of 300 to 850. Within that range, there are different categories, from bad to excellent. They generally look like this:

• Excellent Credit: 750+
• Good Credit: 700-749
• Fair Credit: 650-699
• Poor Credit: 600-649
• Bad Credit: below 600

The Credit Score Range Scale

There are many different credit scoring models or formulas. In fact, you’ve probably heard of a FICO score before — but you don’t have just one FICO score — you have dozens. It varies which score a particular lender/credit utilizes.

Basically, the information in your credit reports is used to generate a three-digit credit score, which is a numerical representation of your creditworthiness. Because there are three major credit reporting agencies, and the information collected by them can vary, each bureau gives a score which may vary from one another..

Here are the credit score ranges used by major credit scoring models:

• FICO Score range: 300-850
• VantageScore 3.0 range: 300–850
• VantageScore scale (versions 1.0 and 2.0): 501–990
• Experian’s PLUS Score: 330-830
• TransUnion New Account Score 2.0: 300-850
• Equifax Credit Score: 280–850

With all of the scores listed above, the higher the number, the lower the risk. That means consumers with higher scores are more likely to get approved for credit, and to get the best interest rates when they do. And they are more likely to get discounts on insurance. What is considered a “high” score depends on what type of score is being used.

If your FICO score is 840, for example, you’re just 10 points shy of the highest score possible and your credit is “super-prime.” But if you have an 840 VantageScore 2.0, it’s not as spectacular because you’re 150 points away from the highest possible score. To ensure your credit stays “good” in the long-term, it can help to pick one credit score and monitor your progress over time. It also helps to pay attention to whatever is being cited as a “risk factor” — for instance, say, the amount of debt you’re carrying is too high — instead of a particular three-digit number. Addressing whatever is weighing down a single score will likely bolster your standing across scores. That’s because, while the exact credit score ranges may vary, most models are based on the same five categories:

• Payment History (accounts for 35% of most scores)
• Credit Utilization (accounts for 30% of most scores)
• Length of Credit History (accounts for 15% of most scores)
• Mix of Accounts (accounts for 10% of most scores)
• New Credit Inquiries (accounts for 10% of most scores)

It’s a good idea to review your credit reports for the finer details influencing your credit scores, as well as to monitor your scores for any sudden changes, as these can be a sign of identity theft. Knowing your scores will help you have an idea of what types of terms and conditions you may qualify for on any lines of credit or loans.

What Does FICO Stand For?
The name FICO comes from the company’s original name, the Fair Isaac Co. It was often shortened to FICO and finally became the company’s official name several years ago.

To create credit scores, they use information provided by one of the three major credit reporting agencies — Equifax, Experian or TransUnion. But FICO itself is not a credit reporting agency.

Though FICO scores are the most widely used among lenders, there are other scores lenders can choose from, such as the VantageScore.

What’s Not on My FICO Score?
While FICO considers a wide range of information to come up with your credit scores, there is a lot of information that is not used. According to FICO, the scores do not consider anything that isn’t on your credit report, which includes your race, religion, national origin, sex, marital status and age. Here are some other things that FICO says it does not factor into its scores:

• Employment information, including your salary, occupation, title, employer, date employed or employment history
• Where you live
• The interest rates on your credit accounts
• Child or family support obligations
• “Soft” inquiries (requests for your credit report), which include requests you make to see your own credit reports or scores
• Any information that has not been proven to be predictive of future credit performance
• Participation in a credit counseling program

FICO has dozens of credit score models. Some are specific to what the consumer is applying for. For example, if you’re applying for an auto loan, your potential creditor may use a FICO score formula that gives significant weight to your history of making auto loan payments. Other models are customized for FICO’s clients.

Additionally, FICO updates its general formulas from time to time, with the most recent being the FICO 9 rollout in 2014. Paid collection accounts are not factored into FICO 9 scores, and unpaid medical collections have less of a negative impact on credit scores, compared to other credit scoring models and previous FICO algorithms.

Vantage Score

What do the codes on my VantageScore mean?

When you receive a credit score from a lender, the CRCs, and even some educational websites, it could contain up to four reason codes, which are also known as score factor codes. These codes, and their brief descriptions, are meant to help you understand how information in your credit files affects your credit score—and explain why you may not have a perfect score. For an explanation of your codes visit ReasonCode.org.

Where can I find more information about credit scores?

Become a more informed borrower by visiting YourVantageScore.com. You’ll find tools and information to help you better understand how credit scoring works, including:

• Timely articles and other credit scoring resources
• VantageScore’s monthly newsletter
• Links to our social media sites

What is a credit score?

A credit score is a three-digit number that companies use to help determine whether they’ll extend credit to you, and at what terms. Banks, credit unions, loan companies, credit card firms, utilities, landlords and other entities all use them, although not necessarily in the same ways.

The three-digit credit score number is generated by a mathematical formula using the information contained in your credit file. Your credit file is a record of your payments, open and closed accounts and other financial information submitted by banks and other firms to one of the three national Credit Reporting Companies (CRCs): Equifax, Experian and TransUnion. Credit score models like VantageScore distill that information into a three-digit number that reflects the likelihood you will become 90 days past due on a payment in the future. In general, the higher your score, the less likely you are to miss future payments.

What is VantageScore?

VantageScore is a mathematical credit score model used today by lenders across the U.S. to look more closely and broadly at borrowers’ credit files—and gain more insight about their ability to repay.

How is the VantageScore model different?

Credit scoring companies all use different mathematical models to generate your credit score. But not all of them look at the same information in the same way, and some ignore records that might cast your credit activity in a better light.

For example, older credit score models focus on the most recent six months of information in your credit file, but the VantageScore model considers at least 24 months of credit file information. This and other behind-the-scenes features mean the VantageScore model can generate scores that are more predictive, and it can score up to 35 million more people— so more consumers are likely to have a score, and therefore have access to credit at the right terms.

What affects my score?

Your VantageScore credit score—and other credit scores—depend on information such as the number of your credit accounts, amounts you’ve borrowed, the speed you’ve paid them back, and other factors like those listed here.

• Payment History — Make sure you pay your bills on time (Extremely Influential)
• Age & Type of Credit — It’s helpful to maintain a mix of accounts (credit cards, auto, mortgage,) over time to improve your score (Highly Influential)
• % of Credit Limit Used — Focus on keeping revolving balances low, under 30% of credit limits (Highly Influential)
• Total Balances — Best to reduce the amount of debt you owe (Moderately Influential)
• Recent Behavior — Don’t open too many accounts too quickly (Less Influential)
• Available Credit – Only open the amount of credit you need (Less Influential)

What doesn’t count?

Other things don’t factor into the VantageScore model—or any other credit scoring model, for that matter—including race, color, religion, nationality, gender, marital status, age, salary, occupation, title, employer, employment history, where you live or even your total assets.

How do I improve my credit score?

There are several ways to improve your credit score. In general, it’s most important to focus on improving what’s in your credit report by ensuring that you use your credit optimally. Here is some advice:

• Pay your bills on time. How promptly you pay your bills has the strongest influence on your VantageScore 3.0 credit score
• Apply for credit only when you need it. Do not open too many accounts too frequently. And avoid opening multiple accounts within a short time span
• Keep your outstanding balances low. A good rule of thumb? Keep balances below 30 percent of the credit limit on any account
• Reduce your total debt. It is not necessarily bad to owe some money. But it is not good to owe too much money. Consider paying down some of your outstanding loans
• Build up a credit history. Maintaining a timely payment history for a mix of accounts (e.g., credit cards, auto, mortgage) over a longer period can improve your score

What does my score mean?

Credit scores are just one piece of information that lenders could use to evaluate your creditworthiness. The impact of your score will depend on where it falls along the range of possible scores, something that can vary between different types of credit scores. The VantageScore 3.0 model, for example, uses a score range of 300 to 850, which is similar to other models. On that scale, here’s what your score would indicate:

• Excellent (781–850) = ranks higher than 77 percent of U.S. consumers. Most lenders are likely to provide the best credit terms available to these consumers
• Great (721–780) = ranks higher than 60 percent of U.S. consumers. Most lenders are likely to provide very good credit terms to these customers
• Good (661–720) = ranks higher than 45 percent of U.S. consumers. Most lenders are likely to provide reasonable credit terms to these consumers. Some lenders may wish to review the credit history of consumers in this category in more depth and may require additional documentation in order to extend favorable terms
• Fair (601–660) = ranks above 32 percent of U.S. consumers. Lenders typically view consumers in this category as higher risk. While many lenders still make credit available,
• they likely will offer somewhat less favorable terms to compensate for higher default rates in this category  Unfavorable (500–600)= ranks in the lowest 32 percent of U.S. consumers. Lenders generally view this as a very high-risk group. Some traditional lenders may extend credit but will require much higher interest payments to compensate for the increased risk associated with this category
• Deficient (300–499)= ranks in the lowest seven percent of U.S. consumers. Lenders generally view this as a very high-risk group. Many prefer not to extend credit to this group. Some may extend traditional credit but will require much higher interest payments to compensate for the increased risk associated with this category