Arghhh! Why Is My Credit Score Different?
06/24/2021
Have you ever been in the position where you thought you knew your Credit Score, but when your lender pulled it, it was about 50 points different? This is now more common due to the various scoring models that exist.
The two main scoring models are VantageScore® and FICO®. While both models use data obtained from consumer credit reports to generate credit scores, the key factors that each model uses to calculate it are different.
Let’s start with FICO®, the current scoring model that Atlantic and many other lenders use. FICO® groups the information into five categories and gives good guidance on the impact of each component. However, it would be best to keep in mind that the nitty-gritty elements are proprietary and top-secret – like the B&M Baked Beans recipe. But this is the insight they do provide:
- Payment history: 35%
- Amounts owed: 30%
- Length of credit history: 15%
- New credit: 10%
- Credit mix: 10%
For an overview of each item, click on the links provided for a quick 60-second video.
The VantageScore® model is a bit vaguer with its calculations but divides the information into six main categories. This model is used by companies such as SavvyMoney (offered with the New Digital Banking by Atlantic) and CreditKarma, which empowers you to take control of your credit.
- Payment history: extremely influential
- Age and type of credit: highly influential
- Percentage of credit limit used: highly influential
- Total balances and debt: moderately influential
- Recent credit behavior and inquiries: less influential
- Available credit: less influential
Outside of the small details provided, the most significant difference is that VantageScore® offers a trending score based on more information than FICO®. The trending shows you where your credit score is headed instead of a snapshot in time like FICO®.
In the end, regardless of the credit bureau or scoring model used, they are all based on information in your credit reports. Instead of focusing on the score itself, focus on your reports information and critical factors to help you make your credit stronger overall.
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