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Credit Reports & Scores

Credit reports and scores…what is the difference? Despite what most people believe, your credit report does not contain your credit score.

  • A credit report is a record that shows how well you have paid your debts.
  • A credit score gives a general estimate of your creditworthiness.

While there are many different credit score models, the two most commonly known and used are the FICO Score and VantageScore.

FICO vs VantageScore – 5 Main Differences

FICO

  • FICO has a different scoring formula for each of the three Credit Reporting Agencies, based specifically on each agency’s data.
  • Scores range from 300 – 850

Vantage

  • Vantage uses one formula for all three of the credit reporting agencies.
  • Vantage scores range from 300 – 850 and also assigns a letter grade from A to F.

FICO

  • Requires at least 6 months of credit history and at least one account reported in the past six months to generate a score.

Vantage

  • Requires one month of history and one account reported within the past 2 years.

FICO

  • Treats all late payments equally.

Vantage

  • Late mortgage payments are penalized more severely than other types of late payments.

FICO

  • Multiple hard inquiries for a single type of transaction within a 45 day span will be counted as one inquiry.
  • Applies to mortgages, auto and student loans.

Vantage

  • Multiple hard inquiries for a single type of transaction within a 14 day span will be counted as one inquiry.
  • Applies to all types of credit.

FICO

  • Considers all unpaid balances in calculating score.
  • A newer version, FICO 8, will ignore all collections under $100, however it is currently not widely used.

Vantage

  • Ignores all paid collections in calculating the score.

Are you credit invisible?

Building Credit From Scratch

26 million Americans are “Credit Invisible”, meaning 1 in 10 adults does not have any credit history with one of the three national credit reporting agencies. An additional 19 million consumers have “unscorable” credit files, which means they either have a “thin file” with insufficient credit history or they have a “stale file” with a lack of recent credit history. Together, the unscorable and credit invisible make up 20% of the US adult population. Click or tap the image to access a Building Credit from Scratch PDF.

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