Credit scores are a way to compress your bill-paying and borrowing history into a single number. FICO provides the predominant scoring system, used by 90 percent of top lenders. Vantage Score is an alternative system devised by the three leading credit bureaus. The two scoring systems are only approximately comparable.
Both can be divided into five categories that have generally the same meaning in both scoring systems:
- Excellent: Scores in this range give you easy access to credit at the best interest rates available.
- Good: Good credit scores allow you fairly easy access to credit, and you will receive very good, but not the best, interest rates.
- Acceptable: If in this range, you are still likely to be granted credit, but lenders will charge somewhat higher rates and will probably perform extra research before approving loans and credit
- Subprime: There is no guarantee you will receive a loan or credit if you're in this range, and interest rates will be substantially higher. Lenders expect about half of subprime borrowers to miss payments.
- Poor: If you have a poor score, you are virtually cut off from loans and credit. You would have to take steps to improve your credit rating before you could access credit.
FICO scoring was invented by the Fair Issac Corporation to create an easy-to-understand way of rating the likelihood that an individual would pay bills on time. FICO Scores range from 350 to 850 and have the following meanings:
In general, a FICO score of 700 or above provides easy credit access and good to excellent interest rates. About 58 percent of the population have scores of 700 or higher.
Video of the Day
Brought to you by
Related pageshow long does a refund take on a debit card confirmation number for western union what do appraisers look for when appraising a house statutory employee deductions delinquent credit score irs monitor bank accounts california dmv release of liability online how to buy foreclosed homes from banks pellet stove tax credit most expensive cars to insure stock market crash of 1929 effects babysitter and taxes www hchdonline com gold card application make money on etrade form 1099-b instructions lemon law ny new car learners permit car insurance what is a w9 form used for determine value of savings bond domestic partnership irs application for medicaid in florida how much tax to pay on 401k withdrawal apple stock split calculate return on common stockholders equity schedule eye exam walmart online michigan quit claim deed form free does an eviction show up on a background check coda deaf colleen cowgill calculate amortized loan babysitting and taxes windstream phone number customer service how to calculate cash flow to stockholders significance of debt to equity ratio eic income table texas vet land loan us treasury notes and bonds advantages revenue canada fax number capital gains on rsu ny bon license verification how to get cash off ebt card how much do catering servers make compass.ga.gov child care types of security clearances magnets and credit cards refurbished computers for low income families how many payments behind before repossession debt to net worth ratio calculator credit card for bad credit unsecured renew medicaid texas state pension taxable all exclusions from gross income are reported on form 1040 how much does overtime get taxed amortisation of intangible assets goodys phone number buying a fannie mae homepath home etrade maintenance fee ssi loan agreement share buyback investopedia hudforeclosures.com www jcpenney com payment washington state food stamps exemptions on capital gains tax fha loan disadvantages inheritance tax nj gaap capitalization threshold track my indiana state tax refund fha streamline program pros and cons south florida charities irs 8863 instructions medical bills in collections laws home depot community involvement
use different ranges to categorize consumers:
A Vantage Score of 800 or above should provide easy credit and low interest rates. A score of 700 means that you can still get credit, but not on the best terms.
Comparison of Scoring Systems
The FICO Score system qualifies 58 percent of the U.S. population for good or excellent credit ratings, whereas Vantage Score's top two categories encompass only 36 percent of the population. This complicates direct translation from one scoring system to another, because they work on different assumptions and methodologies.
When you receive a credit score, always check the system used. A FICO score of 700 is more advantageous than the same score in the Vantage system.