What is VantageScore 2.0?

What is VantageScore 2.0?

UPDATE: Credit Karma now offers VantageScore 3.0 credit scores from TransUnion and Equifax. Check your scores today!

In the 1970s, the Fair Isaac Corporation created the first credit scoring system, dubbed the FICO score. This has since been standardized as the industry's leading credit score model to assess potential borrowers. More recently, the VantageScore was created in collaboration with the three major credit bureaus (TransUnion, Equifax and Experian) as a new generic proprietary credit score model marketed as a more "consistent interpretation" and "accurate score" than FICO. As Credit Karma provides you with your VantageScore for free, here's what you need to know about it. Note that these details are based on the VantageScore 2.0 model.

Credit Scores Vary

First of all, it's important to keep in mind that you do not have one "true" credit score. There are actually over 100 different credit scoring models used in the industry that varies by bureau, reporting agency, model type and lender. Each model uses a different algorithm that weighs each part of your credit report differently, which explains why you may have a 750 from Credit Karma and a 762 from FICO. We've previously addressed how to understand the credit score differences; there are indeed many different credit score models, but they are all highly correlated. They use different ranges, different formulas, and the information found on your credit report can differ from bureau to bureau, but all the models aim to assess your credit history and translate it into your 3-digit credit score number.

The VantageScore

The three major credit bureaus offer their own proprietary models but usually provide the FICO score to lenders. The VantageScore was created as a consistent credit score model across the three bureaus to compete with the FICO score and offer lenders a more standardized score.

The VantageScore is being touted as "The New Standard in Credit Scoring," and it can potentially become big if the bureaus can compete successfully with the stranglehold FICO has on lenders. It just depends on whether lenders will be willing to change to a different model.

The VantageScore offers additional features that the FICO model doesn't incorporate, such as predictive scoring and a 24-month review of credit history. Here are some of the main differences between the two competitors:

VantageScore
FICO
  • Score range is from 501 to 990
  • VantageScore uses letter grades to spell out your credit health: 901-990 = A or Super Prime, 801-900 = B or Prime Plus, 701-800 = C or Prime, 601-700 = D or Non-Prime, and 501-600 = F or High Risk.
  • Takes into account 6 components of your credit report: payment history, utilization, balances, depth of credit, recent credit, and available credit.
  • VantageScore claims to score thin file consumers more accurately by providing predicative scores for consumers with limited histories
  • FICO range is from 300 to 850
  • No letter grades for FICO
  • Takes into account 5 components of credit report: payment history, amount of debt, credit history, types of accounts, and inquiries.
  • Thin file consumers often cannot generate a credit score at all, or are scored with inflated, high scores because they have few credit actions on file



Bottom Line

The VantageScore's particular credit scoring method is especially good news for consumers with thin files and consumers who may have prior negative actions against them but have a good recent history.

Again, please keep in mind that the VantageScore is one of dozens of models in use, and your VantageScore will still vary between the three credit bureaus. While they use the same scoring model, the information on your credit report may differ from bureau to bureau.

What is most important is that you monitor and manage your credit health by checking your credit score every few weeks. Keeping track of your credit score over time, not just once or twice, will give you the most valuable insights into how to adjust your credit habits to build towards a healthy score.

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.

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Hello Learn Vest advisers:

My VantageScore score is C "good" and Credit Karma gives 628 "poor. Which one the lenders see? I have done my best to improve my credit score and only Vantage Score seems to notice. This is so confusing. Please elaborate.

Carmen

New Learn Vest customer

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Reply by
Treefan

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notice on your credit karma reportcard how long it takes to improve ones credit. i would humbly suggest that you study your reportcard and go into details to learn how credit works. this website is terrific at spelling out the details of credit. my hats off to them. carali, credit improvement takes years to improve. study your report card and you will understand this. my advise is to follow your reportcard's suggestions and be patient. your score may be low today, but if you follow instructions for years to come, in five years you will add 150 points to your score.

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Reply by
BungalowMo

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The lenders likely won't see either.  Lenders use FICO scores.

Reply by
velosity

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THis seems to be completely FALSE. I bad things on my credit from 6 and 7 years ago and since have had impecable credit. Never been late, allways pay my bills and have an ok credit to debt ratio. The FICO give me almost a "B" area or 689 but the Vantage gives lower at a "D" and 648. Now if it tested the last 24 months then and FICO did the farther past than those scores should be reversed.

Reply by
ltwins

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FIVE YEARS u kidin me?? lol

Reply by
mamabear50

4 Contributions
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ok then please explain to me, why did my creidt score go from a 722(for 2 months straight) with nothing changed,same student loan, same paying bills 100% on time, down 50 something points? and so did the vantage score, both went down, my report card grade was a B now its a C! i am very disappointed, because absolutely nothing is different.

Reply by
rjohson

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you got a FHA morthage with a score of  with an average of  650??/

Reply by
mamabear50

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it looks that way but also i went to home ownership classes too which was required in the process of getting the loan, plus, no credit card debt, paid bills on time, got an excellent paying job too.so the 650 isnt all that they looked at.

Reply by
yesiamsunshine

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Good to know! I thought this would be a good place to keep up with all my credit history & scores but I've found they're really pretty much full of poo poo! They show things that have been removed from the 3 bureaus reports AND they have no idea how to answer half of the questions I've sent them. I'm sticking with keeping close watch on my own credit through the bureaus again because this place is just rediculous!

Reply by
kranders1770

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So you got a better mortgage rate than I did with a credit rating of 820? I find that very hard to believe.  

Reply by
lioness45385

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650 score can still qualify you for FHA.

Reply by
mcleank3

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Did you apply for anything (credit card, mortage, loan) that would have needed to check your report? Even just comparing auto insurance rates requires companies to check your rate, and each check can lower your score. Although credit cards and more significant checks will make a bigger difference than auto insurance, and you personally checking report, does not affect the score.

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Reply by
bstn96

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I think folks are forgetting Credit Karma is just a "guide" to watch your credit profile, it is not 100% accurate but a basic on improving your credit histories if you are having or had issues with it.  We can only check our credit reports for "free" once a year and this can show changes in it monthly.  So if you have poor credit and start paying down/off your outstanding debt, make all ontime oayments, etc it shows the changes as you do these things, but again its not 100% accurate and is suppose to only act as a "guide" to your changing history.  And they only use one of the credit bureaus reports to get their info on you, and we all know all three reports are slightly different.  They also are here to show you how you can improve your poor credit reports so its giving you a helping guide.  The only real way to know your true 100% accurate credit scores & history is to obtain a copy of all threee credit bureaus reports.  Credit Karma is a guide and a helpful tool to watch the changes in your scores/history when trying to get it back to good standing or keep it in good standing.      

Reply by
Karmalite

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Believe it or not!  I got a 3.25% loan with a FICO of 649...  So, believe what you want, (of the HYPE) the finance industry is a BIG GAME, a FARCE, there are no standards and if you shop around you can make connections with good deals, just don't jump on the first thing that's offerred to you, then they'll know for sure you're a SUCKER!!!!

Reply by
iamkaramia

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It's true. I'm a realtor and you can get fha loans with with a credit score in the 500's.

http://www.fha.com/fha_article.cfm?id=200

So, people on this board, if your credit sucks, that doesn't mean you can't get a mortgage.
 

Reply by
bonnienclyde13

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0 People Helped

I had a fico score of 680 and my rate is 3.75% w/Guild Mortgage.  If you get a city/county program . . . the rates are better.

Reply by
JenniferBColon

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Necesitas por lo meno 650.

Reply by
btaylorsacto

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I find all credit reporting to be VERY arbritrary.  Why should a person's credit score drop just because you didn't use a card and a company dropped you?  Why are a few late payements so important when the companies get the same amount of interest (or more) on their account if you are late?  A lot of it makes no sense at all...

Reply by
jtrador

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The credit score lenders see is completely different from the scores you are able to see. I have family members in the home mortgage business and have learned a lot from them. Credit Karma might have your credit score as say a 628 and a mortgage bank may pull your credit and it could be a 600 or a 700. I wouldn't pay much attention to your Vantage Score because there isn't any lenders that I personally know of that are using it for anything at this time. I do have one piece of advice, keep your credit card balances under 15% of your limit and pay them off every month and I would not pay on any very old passed due balances, they'lll just fall off after 7 years, now if you're tying to get a mortgage the company might require you to have no collections accounts but hang in there and it'll get better with due diligence. I went through an ugly break up several years ago and had to get a high interest car loan, after I got the loan wich was 18.9% my credit score went down to an all time low of 430. In just over two years time I have a 730 and I have 3 credit cards with over $10,000 in available credit but I never charge more than I know I can pay at the end of the month.

Reply by
erikad99

2 Contributions
0 People Helped

Most likely creditors will see the vantage. You never really can tell which of the 3 bureaus they are going to pull your credit. I think it truly is up to each individual lender.

Reply by
kdfallon1

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There are some large dollar dealers that use only one Score -- which one you would have to ask them.  "You've got good credit."  My answer, "what credit folks do you use?"

Helps a little I guess. <><

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Despite the supposed predictive value of the Vantage score I find it unrealistic.  I have never had a late payment and pay in full each month.  Yet when I increase the amount of items charged my score immediately drops, now down to B, even though all accounts are paid in full each month.  This makes no sense and is certainly not predictive of ability to pay. When you increase credit card purchases Vantage apparently thinks you in dire financial condition and are doing this only because you can't pay your current bills.  Based on what?

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Hi,

I have never had a credit card, i did get a loan, and found out because i paid it off in 3 months, that i got nothing for it towards my credit.  I have had a very hard up life, with no sense of security and never knowing what job I would be working, whether it would be because I had to move and whatnot.  Basically, there were things i could not pay and went to collections. I was young and was worried about now, not later.  Things have finally smoothed out, and I am finally making strides forward.  Now I am at the point I feel I can have credit and use it responsibly.  The problem?  Well My credit score is 564 and I am only showing two accounts in collections on here.  The problem I am having is finding the information on these collections.  How to pay them off, and if they are truelly correct.  I have something posted as state colls, which im guessing is state collections.  Its pretty big and scary number, about 8000.  If i do figure this out, will making payments on collections help my credit score? Or am i screwed untill i pay them completely off.  

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This week my Karma score increased from 664 to 705 while my Vantage score jumped a gigantic 661 to 813.  I applied for Citi credit online and was declined.  I called their credit analyst and she said my Experian score (she wouldn't give me the score) but when I asked if it was below she confirmed it.  EQ is perfect.  TU and EXP have one small neg which will fall off in 30 days.  She said they use 10 different scoring models;  one for credit cards, another for lines of credit, blah blah.  I have had credit for over forty years and understand nothing.  All I did for this huge jump was lower the one Visa I have with Wells Fargo fro 80% utilization to 0 zero.  I want to get a small mtge in Florida (guaranteed by the VA for the first 25% (no down) and no PMI.  Guess I'll wait until Nov while home prices are on the rise as mtge rates.  I hope this helps some of you.

Reply by
ClockHoured

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I agree with you howard3100. My score jumped as well when I brought down the debt on ONE card from 90% utilization to less than 10%. My other balances are all under 10% and my Credit Karma score shot up 35 points in a few weeks.

9 Contributions
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Helpful to 3 out of 4 people

TU FICO went up 10 points but TU VANTAGE went down by 14 points.  My utilization went up from 3 percent to 21 percent from my last report due to a new Paypal Extras MC I received which has some funky payment processing and reporting process.  Paid off my balance a day before the payment due date but the funding source linked to the card which was my bank checking account ends up being an e-check that takes 4 days to process!!

Guess we'll see what happens next reporting period but still weird how my FICO/CK score went up and my VANTAGE score went down.

3 Contributions
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So, just a quick FYI - VantageScore 3.0 was just released this year (2013). It no longer gives a score from 500-990, but a score of 300-850. It has also changed how some of the items are calculated see here http://your.vantagescore.com/score-influences.  For those who want to check it out you can go http://www.vantagescore.com/ or to their consumer site http://your.vantagescore.com/

Reply by
sblakeup

6 Contributions
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Helpful to 3 out of 3 people

...and here were are in mid-February 2014 and CK is still apparently displaying the VantageScore v2.0 model, even though Transunion is using v3.0.  Quizzle (another free service similar to CK and Credit Sesame) displays an Equifax VantageScore on the 300-850 scale (v3.0).  So which is it, CK?  Are you displaying for us a VantageScore v2.0 score and scaling, or are you showing us a v3.0 score with v2.0 scaling?  CK -- you're an awesome free service, but please provide some clarification on this subject.

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I own  a property management company, and would like to try to help out the contributors that are asking for advice on renting with poor credit scores.

Number one is, the majority of landlords in my area of the country including me, run Experian reports on prospects. If I ran Transunion reports, my buildings would be empty since their score is the lowest of all 3. So knowing that, get your Experian score, and know it BEFORE you go looking for a rental. Don't waste the manager/landlord's time and patience, ask them upfront what their credit score requirements are BEFORE you go into all the other issues in regards to renting.

Now, you may have a credit score that's high enough and still be denied. Federal and state tax liens, evictions, and un-discharged bankruptcies less than 2 years old can easily get you denied.

Also, and this is a BIGGIE!!! When you get your credit report, add up your mandatory minimum payments on all your listed accounts. Also note your defferred payments on student loans. Total these together and match them to your gross monthly income that you will be supplying to the landlord. I have denied prospective tenants that have a decent credit score, because their monthly obligations exceed, or come very close to, the total of what they make!!! How will you pay for food, gas, insurance, utilities, etc.?

In conclusion, if your credit score is really bad, stop looking at rentals in very nice to standard middle class neighborhoods. And stop looking at rentals that cost too much for your income in the first place. There are lots of landlords that will rent to people with bad credit. They usually charge double security deposits, and higher than average rents for dumpy/nasty rentals. So get honest with yourself and realize that up front. It will save you a lot of grief. That way you are in a solid position to start to make things right again.

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Reply by
ernestf01

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only one problem your not telling them about. Landlords and business go for experian and equifax credit reports because they are generally the two most out of date on information. So just general opinion they are taking  advantage of their tenants and borrows.I would say I my self had to clean up at least 10 out of date items with equifax and experian over the years due to them not updating their information, Transunions actually only one issue with. People remember kenders and landlords can be predators and will use the agencys that allow them to feed off you the most, If a landlord or lender gives you issues do to experian or equifax try to fix error but you might want to cut bait with them individuals, as for rental properptys you rent should never be more than 25 percent of your or spouse income 30 percent at most. living expense cell,food xtc 25 percent and car insurance 25 percent and last 25 percent extra savings or emergencys, If one of those areas is off you need to bring it under control

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These are all fine comments, but no one can explain WHY I am rated as I am. I cleared my mortgage far ahead of time to save on interest (why would that work against me?). I have several credit cards but usually use no more than two (is that a negative?). I am never late when I maintain a credit-card balance and usually clear balances in full each month (is that seen as a flaw, rather than something positive?). I purchased a completely new HFAC system last year and could have paid cash but, offered a no-interest alternative if I cleared the account in 24 months, opted for that. So far I am well ahead of the ultimate due date, but CreditKarma suggests clearing this no-interest loan and switching to a Discover card (what would be the advantage in this?). Despite my circumspection, I am not considered a "super prime" lending risk but a "prime plus." My rating has actually gone down (is that because I retired three years ago and now live (very comfortably) on a lower income than I had in my "peak" earning years or . . . ?). How can I learn the reasons for my score(s).

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Reply by
ernestf01

87 Contributions
1004 People Helped

reply did your utilization spike at any time and did any old credit fall off your report. old cancel credit does fall off after awhile hurting score. And any thing over 40 percent utilization can hurt you

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who uses vantage score looking for a loan thanks,

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I had shaky credit a few years ago and I followed this similar model; opened a secured credit card with cash which reported to the credit agencies and I've got my score up almost 100 points now.  This didn't happen over night but was due to a combination of paying everything on time, paying down my credit card balances to almost zero, and getting extra credit with the secured card.  I still have one more old collection to pay off but I'm very encouraged with how much my score has gone up just by monitoring it every month and striving to be responsible now.

Cheers!

Joe

Reply by
dmartinlpn

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any idea how often they update your scores.?   I have my credit cards paid down to the 20% mark with the usage being at around 5 % and my score hasnt budged?  *** accurate is Credit Karma?  Thanks for your help

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