Credit Score Scales & Information

Credit scoring models review consumers' credit files to identify common variables. The models are used to highlight variables that are most likely to predict consumers' future behavior when handling financial matters. Some variables are given more weight than others, which can help consumers understand how creditors and lenders judge their creditworthiness.

Credit Scoring

According to the Experian credit-reporting company, lenders as a whole may use any of more than 1,000 types of credit scores to determine consumers' creditworthiness. Yet Experian notes on its website that some scores are used more than others. A credit score reflects a person's credit history. A high score indicates that a consumer has managed credit and debt well by paying bills on time, not racking up large amounts of credit-card debt and not exceeding credit limits. For lenders and creditors, the number indicates whether a consumer is likely to allow an account to become delinquent.

VantageScore

Experian touts the VantageScore as the first credit score developed jointly by the three national credit-reporting companies, which includes Experian, TransUnion and Equifax. Experian says the score is more consistent than others because it uses one set of calculations that produces more uniform results when weighing consumers' credit histories. The VantageScore is based on an A, B, C, D and F rating scale. Scores range from 990 to 501, and top or A-range scores are in the 900s.

FICO Score

Fair Isaac Corporation created the FICO score. According to the company, FICO scores provide the best guide for creditors and lenders to determine future risk based solely on a consumer's credit file data. FICO scores range from 300 to 850, and banks generally view people with higher scores as less risky borrowers who are likely to pay off their loans and credit accounts. Still, the FICO website notes that each lender decides what level of risk is acceptable, so there is no single score that all lenders use to determine a consumer's creditworthiness.

Considerations

Consumers' payment history and debt accumulation usually have the biggest impact on their credit scores no matter what scoring system is used by a creditor or lender. For instance, 35 percent of a FICO score is based on whether consumers pay their bills on time or have delinquent accounts. Payment history impacts 32 percent of the VantageScore. People's credit scores can drop if they accumulate a lot of debt by maxing out credit-card lines. The amount of credit card debt a person has can impact 30 percent of a FICO score and 23 percent of the VantageScore.