Your credit score is the result of a mathematical algorithm used to evaluate a user’s past relationship with credit. This past relationship is known as a user’s credit history. The credit history and the credit score tend to predict a user’s future creditworthiness or rather, the likelihood that he will repay a loan, make his payments on time. Although several different scoring systems exist to determine whether a user has good credit like, FICO and Vantage Scores are the two popular models. Both of these scoring methods use a sliding scale and range.
A user’s credit score, it is amazing how much this one little three-digit number can affect so much of his life, especially when it comes to buying, or rather, borrowing money to purchase something. Whether a user is applying for a car loan, a home mortgage or even a credit card, one of the first things a lender will do is check his credit score rating to see how good his credit is.
Based on this information, as well as other variables, the lender will then approve or deny the credit application.
What are the credit score ranges for the 3 major credit bureaus: Trans Union, Equifax and Experian?
Scores by Vantage Score are also types of credit scores that are commonly used by lenders. The Vantage Score was developed by the 3 major credit bureaus including Experian, Equifax, and Trans Union. The latest Vantage Score 3.0 model uses a range between 300 and 850. A Vantage Score above 700 is considered to be good, while above 750 is considered to be excellent.
Factors of the Vantage Score, which is a type of credit score:
• Most influential: Payment history
• Highly influential: Age and type of credit, percent of credit limit used
• Moderately influential: Total balances and debt
• Less influential: Recent credit behavior and inquiries, available credit
About Trans Union, Equifax and Experian:
• Trans Union – Trans Union used to offer something described a Trans Risk score, which also fell between 300 and 850. This score is nowadays called as the Trans Union New Account Score 2.0. It is designed to help financial institutions manage accessible accounts. This score tells the lender how likely a user has to default in the next 90 days.
• Equifax – Equifax creates the same FICO scores and Vantage Scores offered by the other bureaus, the range for current scoring models is 300-850. The Experian Credit Score presented on its website is actually a Vantage Score.
• Experian – Experian also creates business credit scores, reports and background checks for landlords. Experian also produces the PLUS Score, which falls on a scale of 330 to 830. The PLUS Score is not used by lenders, but is a consumer only score. It is sometimes offered for free online.
Having good credit is important, because it determines whether a user will qualify for a loan. Depending on the interest rate of the loan a user qualifies for, it could mean the difference between hundreds and even thousands of dollars in savings. A good credit score could also mean that user is able to rent the apartment he wants, or even get cell phone service that he need.