Understanding alternative credit scoring models
We all aspire to achieve a high credit score or credit rating. Many people aim for a FICO score of 820 or higher, but so few of us ever achieve this stellar rating. Figuring out how well you are doing by examining your credit score is not that difficult. Once you know your FICO score, you can then make a road map towards improving your credit score. FICO and the new Vantage 3.0 scoring system both use a score range from 301 to 850. There are ranges of numbers within this broad spectrum that rate from bad to excellent.
Excellent Credit: 781 – 850
Good Credit: 661-780
Fair Credit: 601-660
Poor Credit: 501-600
Bad Credit: below 500
You should however be aware that many creditors use an in house credit scoring system. With these systems they take your base score from either FICO or Vantage, and apply in house modifiers to your score. When looking for obtain credit it can help to know exactly what scoring system that creditor is making use of, so that you can better understand before applying where you stand credit wise. Also be aware that just because you might have a credit score in the 650s to 700 range does not mean you will qualify for all financial products, as each lender has their own criteria to base approval on, for example some lenders may only extend credit to those with a credit score of 720 or higher.
Did you know that there are multiple forms of credit scores that lenders can use to determine your credit worthiness? Today lenders do not just rely on your FICO score. With so many different credit scores now available to lenders, it behooves one to learn about these other scoring systems and learn where they reside in these scoring systems. Only by knowing where you fall within a given score range can you understand your credit worthiness within that system.
Here are all of the credit score ranges Various Scoring Models:
All of these credit scoring systems have one thing in common, the higher the score, the more credit worthy you are. If you fall into a high score on any of these models, the more likely it is that you will be approved for credit. Not only that but the higher your score is, the better your interest rate will be. You may also qualify for discounts on insurance when your credit score is high, regardless of what scoring system is being used.
Now as far as the different models values go, just go by how high the score is, for example while an 830 FICO score is excellent credit, having a vantage score of 830 would not be as good, since Vantage goes as high as 990. If you notice drastic differences on any of these scoring models, you should inquire on how that score was calculated.
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