Everything You Need to Know About Your Vantage Score Explained
The three major credit bureaus designed the Vantage Score to give people a more uniform score at all three agencies. This score is unique because it only uses one model of scoring, and this provides a more consistent number. This article will talk about what your vantage score is and why it’s important. We will also discuss the factors that go in to deciding your Vantage score.
What is Your Vantage Score?
Your Vantage score is a credit reporting model. It pulls information from Experian, TransUnion, and Equifax. Once it has this data, it compiles it into a final credit score. The score ranges from 300 up to 850, and the higher it is, the better off you are. The four credit categories you’ll get assigned from are listed below.
- Poor Credit – 630 and Below
- Average or Fair Credit – 631 to 690
- Good Credit – 691 to 720
- Excellent Credit – 721 and Above
As soon as you get your Vantage score, you can see where you fall into the categories. The higher your Vantage score is, the better interest rates you’ll get. You’ll also be approved for lines of credit quicker because lenders will see you as a low-risk client.
What Factors Into My Vantage Score?
Your total Vantage score is made up of five primary elements. This score will fluctuate depending on any changes that may occur. For example, if you fall behind on payments, this will cause your score to fall. The five elements are listed below.
- Available Credit and Utilization. This item looks at how much credit you have available against how much you use. Your available credit checks how much credit you don’t spend each month. For example, if you have a $4,000 available and you spend $2,000, your utilization would be 50 percent. You’ll get penalized if you’re consistently using a lot of your credit limit. You want this number to be 30 percent or lower each month. This will show a lender you’re not dependent on credit.
- Balances. Your balance is the total amount of your loans. If your loans are going to collections, or if you’re behind, your score will be lower. This is a penalty they give you if your debt is growing faster than you’re paying on it.
- Credit History Depth. Your credit history depth is the age of your credit history. It also looks at the different types of accounts you have open. Your score will be better with an older credit history. It will also help if you have a mix of auto loans, credit cards, mortgages, and so on. This will all contribute to raising your score.
- Payment History. This is the most important element in your Vantage score. This looks at whether or not you’ve paid your bills promptly. Your Vantage score won’t reward you for on time payments, and it will lower if you’re late paying. If you have trouble paying your bills on time, this looks risky to lenders. They may assume you won’t be able to make a loan payment on time either and not give you one.
- Recent Credit Lines. This factor looks at how many hard inquiries have been made on your account recently. If you have several hard inquiries in a short span, a lender can view you as desperate. This could make you look financially unstable and a risk for them to loan you anything. If you space your hard inquiries out, they won’t count against your score.
What Percentage Does Each Element Factor Into My Vantage Score?
Now that you know what factors go into your Vantage score, you have to know what percentage they affect it. You won’t be able to start correcting your score if you’re not sure how heavily certain factors work into it.
|Vantage Score Factors|
|Available Credit and Utilization||23 percent|
|Credit History Depth||21 percent|
|Payment History||40 percent|
|Recent Credit Lines||8 percent|
Who Looks at Your Vantage Score?
The Vantage Score is quickly gaining popularity with lenders. As of 2015, seven out of the ten biggest United State’s banks use the Vantage Score. There are also over 2,000 lenders who use this score. It is quickly becoming popular because it is the most consistent model out there. The Vantage Score is also continuing to evolve. Vantage 4.0 is set to be released in late 2017 or early 2018. This model will bypass civil judgements and tax liens. It will also focus less on collections accounts that are related to medical issues. Finally, it’ll pay closer attention to how various credit elements are moving. Your Vantage Score is a great tool to use if you want to monitor your credit. You can also use it to improve your credit by paying down debt, and having a good payment history.
This article has gone over what your Vantage score is any why it’s popular. We talked about what elements go into deciding your score as well. We also touched on how heavily the different elements factor into the total rating. Finally, we talked about who looks at your vantage score and why it’s important. If you use this article as a guideline, you should be able to improve your Vantage Score.