Understanding VantageScore^® Ranges

Highlights:

• VantageScore^® draws on credit data to generate a credit score.
• The VantageScore credit score has ranges between 300 to 850.
• Higher credit scores indicate better credit worthiness. Credit worthiness is the likelihood that a person won't go 90 days, or more, past-due on a payment.

VantageScore is a credit scoring model that assigns consumers a credit score between 300 and 850 based on their credit history. The higher the score, the more creditworthy a consumer is.

Credit scores are important, because they are designed to indicate your credit risk, or how likely you are to pay your bills on time. Higher credit scores mean you have demonstrated responsible credit behavior in the past, which may make potential lenders and creditors more confident when evaluating a request for credit.

What Is VantageScore?

VantageScore is a consumer credit scoring model developed by the three nationwide credit reporting agencies (NCRAs)—Equifax^®, Experian^® and TransUnion^®. VantageScore 3.0 is available at all three of the NCRAs, making it a reliable and consistent credit scoring model. It's also important to know that you don't only have one credit score—there are different scoring models that lead to different numbers, and the three NCRAs will often show slightly different scores based on which information is reported to them by your lenders. There are many different credit scores and credit score providers.

Understanding VantageScore Ranges

The VantageScore 3.0 credit scores ratings range from 300 to 850.

Potential lenders and creditors look at your credit scores as one factor when deciding whether to offer you new credit. Lenders may also use your credit scores to set the interest rates and other terms for any credit they offer. But there's no “magic credit score number” that guarantees a loan approval or better interest rates and terms.

The credit score range you fall in can influence the type of credit offers, rates and terms you can receive. For example, a lot of credit card issuers require a credit score that's either "good" or excellent", which is a VantageScore of 661 or above.

How a VantageScore 3.0 is Calculated

Six main categories go into calculating your VantageScore 3.0:

Factors Influencing VantageScore 3.0 Credit Score

VantageScore 3.0 emphasizes payment history, depth of credit and utilization.

• Payment history (40%)—Repayment behavior by paying bills on time to avoid delinquency. More recent or multiple late payments can hurt your score.
• Depth of credit (21%)—Depth refers to the ages and types of credit accounts you have. Lenders typically prefer individuals with long-term and varied accounts.
• Credit utilization (20%)—This refers to the percentage of your total credit used from the total credit available to you. Lenders generally see credit utilizations under 30% more favorably.
• Balances (11%)—The total amount of recently reported balances. Keep the amounts you owe low by paying off monthly balances.
• Recent credit (5%)—The number of recently opened credit accounts and credit inquiries.
• Available credit (3%)—The amount of credit available to you. Lenders consider how much credit you have available. Keeping this amount high shows responsible spending.