What is a VantageScore?
Key takeaways
- VantageScore is a credit scoring model that helps lenders make credit decisions when applicants apply for a loan or other type of financing.
- This credit scoring model works similarly to the better-known FICO scoring model, although it weighs a slightly different set of factors when determining scores.
- You’ll take many of the same steps to improve your VantageScore as you would any other type of credit score, including paying your bills on time, paying off debt to reduce your credit utilization ratio and using different types of credit over time.
Your credit score can make a huge difference in your life, in more ways than you think. This three-digit representation of your credit health can make your life easier (or harder) when it comes to accessing credit cards, getting a mortgage or apartment rental and determining whether you need to put down a security deposit for your utilities.
VantageScore is a credit scoring model developed by the three major credit reporting companies — Equifax, Experian and TransUnion — in 2006, and it’s one of several possible credit scores a credit reporting agency can use when you apply for financing. However, VantageScore has some key differences from other popular credit scoring models that are worth understanding as you strive to improve your credit score.
What is a VantageScore?
VantageScore is a popular credit scoring model that’s used to calculate a person’s credit score. The most recent scores created by VantageScore range from 300 to 850 and take into consideration factors like credit utilization, payment history, account types, the average age of accounts and the number of new accounts.
Differences between VantageScore 4.0 and VantageScore 3.0
The two most popular versions of VantageScore are VantageScore 4.0 and VantageScore 3.0., although VantageScore 3.0 is more commonly used by lenders. The main difference between VantageScore 4.0 and VantageScore 3.0 is that the newer model (VantageScore 4.0) presents a more accurate prediction of your financial reliability through the use of machine learning and trending credit data available through major credit reporting agencies. Vantage 3.0, on the other hand, just relies on your financial history.
The VantageScore 4.0 model also changed the impact of negative credit records. For example, VantageScore 4.0 gives less weight to tax liens and public records, according to its documentation.
What about VantageScore 4plus™?
In May 2024, VantageScore rolled out its newest model for credit scoring — VantageScore 4plus™. This new scoring model leans heavily on the scoring functions of VantageScore 4.0. However, it creates an “actionable, real-time adjusted credit score based on attributes that leverage consumer-permissioned bank account information that is FCRA compliant.”
What does this mean for consumers? For the most part, this means VantageScore 4plus™ relies on some forms of alternative banking data to help consumers score better overall. For example, this scoring model looks at information like personal checking and savings accounts a person has, as well as their history of debits and deposits in those accounts.
According to VantageScore, VantageScore 4plus™ is currently available in a pilot version for lenders, and it uses the same credit score range (300 to 850) as VantageScore 4.0.
How is a VantageScore different from a FICO Score?
VantageScores and FICO scores are both models for scoring a person’s creditworthiness that aim to determine how likely it is for a borrower to fall behind on a payment. But how are they different?
- Scoring model: VantageScore uses a tri-bureau scoring model, while FICO uses bureau-specific models. That said, both your VantageScore and FICO score may vary from bureau to bureau, depending on the specific information each bureau has on your report.
- Scoring requirements: VantageScore claims that one of its newer models, VantageScore 4.0, has increased accurate reporting for individuals who weren’t previously given credit scores. This is because it can consider shorter credit histories to award a score.
- Credit scoring factors: While roughly the same categories are used to calculate your score between the two models, VantageScore and FICO weigh those factors differently.
When it comes to credit scoring, it’s not really about a VantageScore versus a FICO score. Creditors can use one or both to understand the risk of working with a borrower. Plus, the information factored in is similar enough that the same good habits can help you improve both scores.
What makes up a VantageScore?
VantageScore considers similar categories as other credit scoring models, but it weighs these factors a little differently. Also note that VantageScore 3.0 and VantageScore 4.0 weigh each factor with a slightly different percentage.
The chart below shows how both major VantageScore models in use today weigh each factor and their overall level of influence.
| VantageScore factor | VantageScore 3.0 weight | VantageScore 4.0 weight | Level of influence |
| Payment history | 40% | 41% | Late payments can negatively affect any credit score in a big way. For VantageScore, this factor is considered extremely influential. |
| Depth of credit | 21% | 20% | Depth of credit looks at how old your credit accounts are. This factor is considered highly influential in determining VantageScore credit scores. |
| Credit utilization | 20% | 20% | VantageScore models place significant weight on your credit utilization and consider it highly influential. Credit utilization is how much credit you currently use compared to the amount of credit you have available. |
| Balances | 11% | 6% | This factor looks at all credit balances you owe on all your accounts, including whether they are up-to-date or delinquent. High balances can hurt your score, but this factor is only moderately influential with VantageScore scoring models. |
| Recent credit | 5% | 11% | Recent credit is considered moderately influential and considers factors like recent accounts you opened and other recent activity. |
| Available credit | 3% | 2% | The available credit category accounts for available credit you have on all your accounts. While this factor isn’t very influential on your scores, having more available credit looks better overall. |
What is a good VantageScore?
A good credit score is crucial if you want access to loans and other financing vehicles at the best rates and terms. You should also know that, when it comes to VantageScore credit scores, the range of scores that count as “good” is slightly different than what you’ll find with FICO scores.
When it comes to VantageScore credit scores, a “good score” falls between 661 and 780.
Here’s a summary of all five VantageScore ranges to consider as well:
- Excellent credit: 781 to 850
- Good credit: 661 to 780
- Fair credit: 601 to 660
- Poor credit: 500 to 600
- Very poor credit: 300 to 499
It’s important to understand which VantageScore range you fall into because it can affect approvals for things like credit cards, apartment rentals and loans. You might see a product advertised as requiring “good credit” or “fair credit,” for example.
How to check your VantageScore
There are paid and free ways to check your VantageScore. One way to view your score is to pay for access through one of the major reporting companies. Equifax, Experian and TransUnion all offer paid access to your credit score.
While paid access can come as part of a package deal with other features like credit monitoring, there are plenty of free ways to access your credit score, too. For instance, many credit card issuers offer access to your VantageScore just for having an account. However, some card issuers offer a free FICO credit score to cardholders instead.
Get free access to your credit report each week
You can get access to your credit reports once per week through the website AnnualCreditReport.com. These reports are available for all three credit bureaus, and they provide information on your accounts that can influence your credit scores throughout the year.
For example, looking over your credit reports can help you spot payments that are falsely reported late when you made them on time, incorrect account balances or accounts you closed that are still listed as open. Your credit reports can also reveal the earliest signs you’ve become a victim of identity theft, including fraudulent accounts you don’t even recognize.
These are just some of the reasons to look over your credit reports at least a few times per year, or even weekly if you prefer. Doing so is entirely free of charge, so you have nothing to lose.
How to improve your VantageScore
If your credit score isn’t in the good or excellent range, and you have plans to apply for a loan or line of credit in the future, it’s worth thinking about how you can improve your credit score. There are a few simple steps you can take to start working toward a better credit score.
- Check your credit reports: Even though you can’t view your score on the free versions of your credit reports, you can view your credit history. This is a good way to find any past due accounts you may not be aware of or to identify errors on your reports so you can dispute them.
- Pay your bills on time: Late payments can hurt your credit, and the longer you wait to catch up, the harder it can be to recover. Getting and staying current with your bills is a fail-safe way to improve your credit score.
- Use less of your available credit: VantageScore and FICO both factor credit utilization into your score. If you need to raise your score, you can work on paying down some debts so that your account balances make up a smaller percent of your available credit. VantageScore advises a credit usage rate of 30 percent or below for the best results.
- Don’t rush new account openings: Multiple hard inquiries aren’t the most important factors in a VantageScore, but they can still hurt your rating. Make sure you’re only opening new accounts when you need the credit.
The bottom line
Understanding your VantageScore gives you a clearer picture of how creditors and lenders view your level of risk as a borrower. Just remember that the steps you’ll take to improve your credit are the same regardless of which score a lender uses when you apply for credit. Pay your bills on time, keep debt levels in a reasonable range and use credit responsibly otherwise, and your credit score should move into the “good range” or higher in no time.
You may also like
What is an unsecured business loan and how does it work?