VantageScore
CreditGlossary term
Definition
A credit scoring model created jointly by the three major credit bureaus (Equifax, Experian, and TransUnion) as an alternative to the FICO Score. It also ranges from 300 to 850 and uses similar factors but weighs them slightly differently. VantageScore can generate a score with as little as one month of credit history, making it useful for people with thin files.
Related terms
- FICO ScoreA credit score developed by the Fair Isaac Corporation, ranging from 300 to 850, that lenders use to evaluate your creditworthiness. It is calculated based on five factors: payment history, amounts owed, length of credit history, new credit, and credit mix. A higher FICO Score generally means better loan terms and lower interest rates.
- Credit BureauA company that collects and maintains your credit information, then sells it to lenders and other authorized parties as credit reports. The three major credit bureaus in the United States are Equifax, Experian, and TransUnion. Each bureau may have slightly different information, which is why your credit scores can vary between them.
- Thin FileA credit report that contains very little credit history, typically because the person is young, new to the country, or has used very few credit products. Having a thin file makes it difficult to generate a credit score and can lead to loan denials or less favorable terms from lenders. Building credit through secured credit cards, credit builder loans, or becoming an authorized user can help fill out a thin file.
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