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Everything You Need to Know About VantageScore

If you plan to apply for a credit card, personal loan or a mortgage, odds are lenders will want to take a look at your credit history. That includes checking your credit scores. 

While you may be familiar with FICO credit scores, there’s another credit scoring system lenders can review to evaluate how responsible you are financially. It’s called VantageScore and it can also be used to gauge creditworthiness.

What Is VantageScore?

VantageScore is a credit scoring system developed by the three major credit bureaus: Equifax, Experian and TransUnion. The credit scoring model, first introduced in 2006, is used by lenders and creditors in a variety of borrowing situations. 

RELATED: How to Improve Your Credit Score

How VantageScore Is Calculated

VantageScores draw on data from your credit reports to calculate your credit scores. Your VantageScore can range from 300 to 850, with 850 representing a perfect score. 

In terms of what affects your score, here’s how VantageScore 4.0 breaks down:

  • Extremely Influential: Total credit usage, balance and credit limit
  • Highly Influential: Credit mix and experience
  • Moderately Influential: Payment history
  • Less Influential: Age of credit history
  • Less Influential: New accounts

In order of importance, credit utilization takes precedence. Credit utilization refers to the percentage of your total credit limit you’re using at any given time. After that comes the type of credit you’re using, followed by how timely you are in paying your bills. Having older accounts on your credit history and limiting how often you apply for new credit can work in your favor, but they’re less important overall. 

VantageScore also takes trended data into account when calculating your scores. Trended data looks at your credit use and financial habits over time. For example, how often you carry a balance on your credits or whether you pay just the minimum due each month.

RELATED: How To Get A Personal Loan With Bad Credit

What Is a Good VantageScore?

On the VantageScore scale, it’s possible to have excellent credit, poor credit or fall somewhere in-between. Here’s how VantageScore ranges compare: 

  • Excellent: 781-850
  • Good: 661-780
  • Fair: 601-660
  • Poor: 500-600
  • Very Poor: 300-499

As a general rule with VantageScores or any credit scoring model, a higher score is better. The higher your score, the less risky you appear to lenders and the more likely you are to be approved for credit at favorable interest rates.

RELATED: What Are FICO Reason Codes?

VantageScores vs. FICO Scores

Your VantageScore and FICO score can both tell lenders how responsible you are when using credit. Both operate on a range from 300 to 850 and both use information from your credit reports for score calculations. But there are some key differences between them.

First, VantageScore is a tri-bureau credit scoring model, meaning it incorporates data from credit reports issued by all three credit bureaus. FICO scores, on the other hand, are calculated on a bureau-by-bureau basis. 

With VantageScores, you need just one account to generate enough data for a score. It doesn’t matter how new or old the account is. FICO scores also require you to have at least one credit account in your name to calculate a score. But that account must be at least six months old. 

More significantly, VantageScore and FICO don’t weigh credit data in the same way when calculating scores. With VantageScore, credit utilization is most influential while payment history ranks third. For FICO scoring, payment history accounts for the largest share of your score, at 35%. Credit utilization accounts for 30% of your score. 

That means that your VantageScores could be very different from your FICO scores, depending on your payment history and credit utilization. For that reason, it’s important to know which scoring model a lender uses when applying for credit so you can evaluate your approval odds, based on your FICO or VantageScore.

RELATED: How Do Credit Utilization Ratio and Debt-to-Income Ratio Affect My Credit Score?

How to Improve Your VantageScore

If you’re interested in checking your VantageScore, you can do so for free through one of several partner score providers. Once you’ve checked your score, you can look for opportunities to improve your score if it isn’t as high as you’d like it to be.

According to VantageScore, some of the best ways to do that are:

  • Keeping revolving debt balances (i.e. credit cards) under 30% of your credit limit
  • Maintaining a mix of different credit accounts
  • Paying all your bills on time
  • Keeping older credit accounts open
  • Avoiding opening new credit accounts too often

If you’ve only had credit cards in your name, you could diversify your credit mix with a personal loan. You could use a low interest rate personal loan to consolidate higher interest credit card debt or borrow for any other reason. Making your loan payments on time could help make a positive impact on both your FICO credit scores and your VantageScores over time. Just be sure to compare lenders and personal loan terms carefully before applying to find the right loan for your needs and budget.

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Rebecca Lake

Rebecca Lake is a freelance writer specializing in personal finance, credit and debt. She’s a contributor to U.S. News and World Report, Forbes Advisor and The Balance and her work has appeared online at, MyBankTracker, and dozens of other top publications.

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2020-12-15T07:46:32-08:00December 8th, 2020|Credit Score|
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