What Is VantageScore 3.0? What to Know

VantageScore 3.0 is one of many credit scoring models used by financial organizations, lenders and credit bureaus. You may already be familiar with FICO scores, which is one of the most common credit scoring models in use today. VantageScore is another commonly-used credit score. Typically, it’s the credit score relevant to your credit report or whether or not you can get a loan comes down to one of these two models.

A Brief History of VantageScore
Do You Have a VantageScore and Why Does It Matter?
How Is VantageScore 3.0 Calculated?
What’s a Good Score on the VantageScore 3.0 Model?
What’s the Difference Between VantageScore 3.0 and FICO?

A Brief History of VantageScore

VantageScore was founded in 2006 by three major credit bureaus—TransUnion, Equifax and Experian. They wanted to create a credit scoring model that competed with the popular FICO models while also expanding credit scoring reach. In short, they wanted to help more people qualify for a credit score.

Over the years, the VantageScore model has been upgraded multiple times, with four separate models launched:

VantageScore 1.0 in 2006
VantageScore 2.0 in 2010
VantageScore 3.0 in 2013
VantageScore 4.0 in 2017

Even though there’s a newer VantageScore model, many creditors and individuals still use the 3.0 model to understand credit worthiness or track credit history.

Do You Have a VantageScore Credit Score and Why Does It Matter?

A study conducted in 2019 indicated there were around 12.3 billion VantageScore credit scores. And the model continued to gain traction in intervening years. So, there’s a good chance you do have a VantageScore. In fact, around 40 million people who don’t have a score under other score models have a VantageScore.

Some FICO scoring models require you to have an account for a certain amount of time before it counts toward your credit score. VantageScore models, on the other hand, typically take items into account as soon as they’re reported. That can make it easier for consumers to have one of these scores. However, you do need somecredit history to have a score.

So why does your VantageScore 3.0 matter? For a few reasons. If lenders or other decision-makers look at this score, it can impact what services, interest rates or jobs you might be able to get.

Do Any Lenders Use VantageScore 3.0?

You might wonder if lenders really use this model. If there’s a newer VantageScore model out there, and there are dozens of FICO models, do lenders actually turn to VantageScore 3.0 often?

According to VantageScore, the answer is yes. From July 2018 to June 2019, the company reported a 19% increase in the number of scores available. And the types of companies that make up the bulk of VantageScore’s client list are financial institutions. That includes credit card companies, mortgage lenders, credit unions, banks and auto lenders.

How Is VantageScore 3.0 Calculated?

The exact math that goes into a credit score is proprietary. That means the company isn’t going to publish it because they make money from it.

However, VantageScore is fairly transparent about what matters for its credit scores and what doesn’t. It also defines what matters more. Here’s a look at what VantageScore says influences your score:

Credit utilization, which is how much of your credit you’re using compared to your balance and how much credit you have available. VantageScore rates this as moderately influential.
Credit mix and experience, which is whether you have experience handling different types of credit, including revolving and installment accounts. VantageScore says this is highly influential.
Payment history, which is whether you pay your bills on time. VantageScore rates this as extremely influential.
Age of credit, which is how long you’ve had credit. This is rated as less influential.
New accounts opened, which is how often you’re applying for and opening new accounts. VantageScore also says this is less influential.

VantageScore also lists things that don’t factor into your score. They include factors such as demographics, where you live, how much you make and what your total assets are.

What’s a Good Score on the VantageScore 3.0 Model?

The VantageScore model runs from 300 to 850. According to VantageScore, a good credit score on their model would be 661 to 780, and an excellent score would be anything above that. Here’s how it breaks down:

Very poor: 300 to 499
Poor: 500 to 600
Fair: 601 to 660
Good: 661 to 780
Excellent: 781 to 850

What’s the Difference Between VantageScore 3.0 and FICO?

VantageScore 3.0 and FICO scoring models are used in similar ways, but there are some differences. For example, the FICO score has a slightly different breakdown for the ranges:

Very poor: 300 to 579
Fair: 580 to 669
Good: 670 to 739
Very good: 740 to 799
Excellent: 800 to 850

The factors that influence a FICO credit score are also a little different.:

Payment history, which accounts for around 35%
Credit utilization, which accounts for around 30%
Credit age, which accounts for around 15%
Credit mix, which accounts for around 10%
New applications and hard inquiries, which account for around 10%

Since various factors are more or less significant depending on the type of scoring model being used, your exact score with each model can be different. This may be relevant when applying for credit, so you might want to keep track of all your credit scores.

Get to Know Your Credit Score Today

Yes, multiple types of credit scores exist. And they can seem complex, but they don’t have to remain a mystery to you. Sign up for your free credit report card get an in-depth look at how you’re doing with the five factors that matter most to any scoring model. Or, sign up for ExtraCredit to see 28 of your FICO scores, monitor your credit and get other ongoing offers.