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.

All Comments

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My Credit started getting bad after my divorce ,I worked hard,paid my bills,till I started getting I'll about 5 years ago and had to be put on disability,and because of not having money come in my hospital and Dr. Bills started coming in which because I couldn't pay a Judgement was put on me and I am still paying to this day to the Hospital not the Drs. Mind you they were both paid,I have always paid them on time since the Judgement but when I go get a small loan to help make ends meet my credit goes down even though I pay on time,I do not understand this system at all

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Im am becoming inpatient with the whole credit score thing. When my credit was bad my vanatage score was high!!! Now that I fixed my credit and now have two lines of credit with payments being on time, my vantage went down alot.... I hope I am able to reap the benefits of having great credit before I die geesh...

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Can anyone tell me why my vantage score has dropped around 40 points in 3 months when all the information has stayed the same on my credit report? Utilization is the same, number of on time payments is up by 3, avg age of accts is up by 3 mos. Vantage climbed 60 points over 6 mos and then dropped 40 in 3 mos. My credit report card has been steadily climbing to and then hovering around 695. I also had the only hard inquiry dropped a couple mos ago. So if anything it should be going up!

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Please help! I do not have the tab available for me to see my Vantage Score..It's supposed to be between the transunion creditscore and the auto insurance score at the credit score center.  When my husband log's into his account, he gets his, so i know where to look and i know it exists.. i've tried logging out and in too. 

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This is BS. My Experian has gone from 688 to 744 last week. The Vantage Score today shows a 4 points drop. Really? I'd like to see their math and how they are calculating the score across three bureaus.

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I tend to agree with a LOT of the comments listed above having relocated to the US from Australia where I had 20k cc with a 0 balance and rating 1 with insurance wich means I had a no claim bonus for not having any claims for 5 years.  Here I have found it very difficult building credit I purchased a home cash a new car cash and financed with the help of my father in law a cheap car that I only did to build credit.  Having just paid it off again early... it appears my score has droped ... The way they seem to work out if your a good risk here seems to not be what you own or your networth but how much you still owe shame on the credit bureas here for not rewarding the good cliients who repay there debt 

Reply by
alwyns

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Just be careful with your driving record here.  I've been driving for 18 years across 12 countries outside of the US before I came here without accident.  

2 years in and I have 2 accidents and 1 written off car against my name and so do many of my immigrant friends.  People just do stupid things over here and cellphones make it worse.

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To find the new scores, Click on the Score Center tab, then click on Update Score on the right of the page, then the new tabs for the Vantage Score & Insurance score will show up above the credit score chart.

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This is Great. It gives me a good understanding of my score.

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I don't understand how you could have "excellent" credit with the big 3, no late payments for decades on anything and your "Vantage Score" is a C.  This makes absolutely no sense.  If they want to average the big 3, fine, but don't come up with some aribtrary new credit score we have to worry about being inaccurant.  The big 3 do that just fine.

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The system is always in favor of lenders, how they can charge more to you.  If you payoff your loans, your score drops.  If you ask for more your score drops.  If you cancel your credit card your score drops.  No matter what you do, the scores will drop.  I think te whole system stinks.  I am heavy user of credit cards but never carry balance from all my cards.  Still at the reporting time, I always get warning for over utilization of credit cards & my score drops.  One moenth I did not use my cards & guess waht score droped!!!! Go Figure!!!  Congress should fix these reporting problems.. Oh well that's another story... Any guess what is credit score for Feds:)

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