There are various ways to calculate credit scores. The common ones are FICO scores and VantageScores. Within these two types, there are various levels of reporting that return results based on different factors. Once your rental application is processed with a credit score report, it will return a FICO 9 score.
What is a FICO score?
A FICO score is a certain type of credit score, developed by the Fair Isaac Corporation, that is based upon the information that can be found in your credit report. This score calculates how risky it is to lend an individual money and how likely they are to pay back their debts.
Your credit history is screened to return a FICO Score 9. The FICO 9 score looks at the following:
- Medical collections that are unpaid have less of a negative effect on the score calculation.
- Third-party collections that have been paid off in their entirety no longer factor into the score; this includes medical debt.
- If rental history has been reported to the credit bureau, it will be factored into the score calculation.
What is a VantageScore?
A VantageScore is a credit score determined by a credit scoring model created in collaboration with the three major credit bureaus: TransUnion, Experian, and Equifax. This scoring method allows individuals with less established credit to have a credit score. There are currently two models available and in use by many banks, credit unions, and online free credit monitoring bureaus.
VantageScore 3.0: This score does not factor in collections accounts that are currently paid in full and only lightly weighs medical collections accounts, even those that are unpaid. VantageScore 4.0: This score leverages machine learning to better understand consumer credit trends. It continues to ignore collections accounts paid in full and gives less weight to medical debt.
Changes in medical debt and how that impacts your score are coming to the VantageScore models, which include:
- Medical debt in collections that are paid are no longer being reported.
- Medical debt in collections that are not paid will not be reported for a year.
- Medical debt that is less than $500.00 will not be reported starting in mid-2023.
Key Differences between FICO and VantageScore
Below, you will see two charts that display the differences in how different parts of your credit report impact and shape your FICO and VantageScore.
myFICO Factors and Description
Factor | Description |
Payment History | Have your past credit payments have been on-time? |
Amounts Owed | Your available credit and how much of that credit you are currently using |
Length of Credit History | How long your accounts have been live and how often you utilize those accounts |
New Credit | Inquiries for new credit in the past 12-month period |
Credit Mix | The types of credit that you currently hold |
VantageScore Factors and Description
Factor | Description |
Payment History | If your past credit payments have been on-time |
Depth of Credit | The age of your accounts and the type of credit you are using (installment vs. revolving) |
Credit Utilization | How much credit you have available and how much of that you are using |
Balances | Total amount owed on all accounts, current and delinquent |
Recent Credit | Hard credit inquiries and the number of new accounts you have opened |
Available Credit | The amount of credit available on revolving accounts (like a credit card) |
The key difference between FICO and VantageScore is how they are calculated. FICO scores place an almost equal emphasis on payment history and amounts owed, while VantageScores use payment history as their key determinant in calculating a score, followed by the depth of credit and credit utilization.
How to get your credit scores
VantageScore offers free credit scores to consumers through its partners. The most common tool used by individuals is Credit Karma, as it displays the VantageScore for all three bureaus and allows If you have a credit card, you may also be able to access free credit monitoring tools through your card issuer.
How can I access my FICO score or report?
You are entitled to request free copies of your credit report from all three credit reporting agencies (Experian, Equifax, and TransUnion) once each year, through AnnualCreditReport.com or by calling 1-877-322-8228.
FICO allows you to keep tabs on your FICO score regularly through its myFICO portal. You can open a free myFICO account for a free credit score, monthly Experian credit report, and monthly Experian credit monitoring, or sign up for paid membership for added benefits.
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