FICO Beacon Score and Vantage Credit Report Score

You have probably heard the term ‘credit score’, but are you aware there are two major types? Here we will review the major differences between the FICO Beacon score and the Vantage score. Understanding how these work will improve your chances of building a solid credit rating.

The typical FICO score will range from 300-850, with 850 being excellent credit. Typically, a score of 620 is the dividing line between prime credit (lower interest rates) and sub-prime credit (much higher rates). With this in mind it is easy to see how maintaining a high credit score can save you a considerable amount of money in the long run.

To determine the differences between a FICO score and a Vantage score let us look at how the FICO score is calculated. Typically it is calculated as follows:

35% based on payment history. More weight is applied to recent payments as compared to past payments.
30% based upon the amount of debt you are carrying.
15% based upon length of credit history. The longer the better.
10% based upon recent credit inquiries. The fewer the better.
10% based upon your credit mix. The more diversified (mortgage, car loan, credit cards, etc) the better.

The Vantage score was developed by the three major credit-reporting agencies as a better representation of one’s creditworthiness. While the FICO score remains the most popular, the Vantage score is catching on. The Vantage score runs on a scale of 501-990 and issues a letter grade to the credit score. Let us look at the components of the Vantage score to see how it differs from the FICO score.

32% based upon payment history. Similar weighting as FICO.
23% based upon total credit available.
15% based upon the portion of your score contributed by your outstanding balances.
13% based upon the kinds of credit held and how long you have held them.
10% based upon the number of recently opened accounts and number of recent queries.
7% based upon the total dollar amount of credit you could potentially use.

The FICO Beacon score was once synonymous with the term ‘credit score’, but the Vantage score seems to be gaining ground. As shown above there are differences between how the FICO score and the Vantage score are calculated. Understanding how each credit score is calculated can help you make better credit decisions to maintain an excellent credit rating

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