There are several credit-scoring models available but here are a few you might want to consider.
FICO Scores
Many lenders started using FICO scores in 1989, and the scoring model has been updated several times since then. In addition to all its base versions, FICO offers industry-specific scoring models for specific credit products, like auto loans, credit cards, and mortgages.
To generate a score, FICO needs you to have at least one account opened for six months or more, with at least one account reported to the credit bureaus within the last six months.
So, even if you view your FICO® scores through your bank, they won’t exactly be the same scores the lender will see when you apply for credit.
Base scores range from 300 to 850, being made up of the following factors:
– Payment history amounts to 35%
– Amounts owed amount to 30%
– Length of credit history amounts to 15%
– New credit amounts to 10%
– Credit mix amounts to 10%
Depending on your scores, you may wonder what they mean exactly. FICO usually defines the following credit ranges:
– Exceptional: 800+
– Very good: 740 to 799
– Good: 670 to 739
– Fair: 580 to 669
– Poor: 579+below
Industry-specific scores have a wider range of 250 to 900, being tailored to specific types of credit. There are a number of ways to get free access to your FICO® scores, such as from various credit card issuers and even Discover’s Credit Scorecard tool.
Credit Scores
Your credit scores are reports of your past dealings with creditors as well as other credit histories, including information like your name, addresses, employers, inquiries from companies checking your reports, and more. If relevant, you’ll also find information here from public records, like bankruptcies, tax liens, and civil judgments.
Though VantageScore® credit scores aren’t as widely used as FICO® scores for credit decisions, they still give you a fairly good idea of exactly where your credit stands. The VantageScore model includes many factors that are also used when calculating the FICO® scores, though it may assign a rather different weight to certain factors.
Eventually, no matter which scores you look at, most give you a good idea of the state of your credit. Staying on top of these scores can help you determine where you stand, and enable you to take steps to improve your credit health.