Credit scores enable you to combine your spending and borrowing history into one figure. The major scoring system that is used by at least 90 percent of leading lenders and credit check companies today is FICO. The three leading credit bureaus, Equifax, Experian and TransUnion, initiated Vantage Score as an alternative system.
These two scoring systems can only be compared in approximate ways. Even using the latest and best credit apps, an accurate Vantage score to FICO conversion is not possible.
Read More: How to Check Your Credit Score
Categories for Both Scoring Ranges
The scoring ranges for both your Vantage Score and FICO can be separated into five different categories. These categories mean basically the same thing in both scoring systems and are used by the best credit check companies. The categories are as follows, as explained in the best credit apps:
- Excellent. If your scores are in this leading range, you will have easy accessibility to credit at the lowest interest rates.
- Good. Having good credit ratings enables you to access credit with relative ease and at the most attractive interest rates currently available.
- Acceptable. With scores in this range, you will probably be granted credit. Yet your lenders will charge higher rates, and they may review your credit history carefully before issuing any credit or loans.
- Subprime. If your credit score is in this range, you cannot be assured of receiving any credit or loans. If you do gain approval for credit or funding, your monthly payments will include a high interest rate. One reason for this is that lenders know that history has shown that about half of subprime borrowers often miss making their regular monthly payments.
- Poor. If your credit score is poor, you will often be excluded from approval for credit or loans. To gain access to credit or funding in the future, you must improve your credit ratings significantly, as explained in the best credit apps.
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The Introduction of FICO Scoring
FICO scoring was created by the Fair Issac Corporation to provide a simplified and easily understood method for evaluating an individual's bill-paying promptness. FICO scores can range from 350 to 850.
Having a FICO score equaling 700 or more usually makes gaining access to credit and loans easy. It also enables you to borrow at excellent interest rates. From 58 to 60 percent of U.S. consumers today have FICO scores of 700 or above.
Comparing Vantage and FICO Scoring
There is no way to perform an accurate Vantage score to FICO conversion. You cannot actually convert a Vantage score into a FICO score. While the FICO Score system evaluates 58 percent of U.S. consumers for excellent or good credit ratings, Vantage Score's top two categories involve just 36 percent of the population. Having a FICO score of 700 is of much higher value to you than having a Vantage system score of 700.
According to credit bureaus, performing an accurate Vantage score to FICO conversion is not possible. There is no method of accurately converting credit scores from the Vantage Score 3.0 or 4.0 models to any FICO score model. In addition, their differences do not remain consistent when evaluating different individuals. Some of FICO's scores use a very different rating scale of 250 to 900 in contrast to the commonly used credit scores of 300 to 850.
Read More: FICO Score vs. Credit Score: What's the Difference?
Adam Luehrs is a writer during the day and a voracious reader at night. He focuses mostly on finance writing and has a passion for real estate, credit card deals, and investing.