When you think “credit score,” you’re probably thinking of FICO, the granddaddy of scores. But there’s a relatively new kid on the block called VantageScore. Here’s what you need to know:
VantageScore crunches the same data as FICO, but with more attention paid to “thin file” consumers—that is, people with a limited credit history.
That includes young adults, recent immigrants, divorcees, and folks recovering from bankruptcy.
In this model, consumers with poor credit are better differentiated, so college grads with no credit history don’t end up with the same score as lifelong deadbeats. This helps lenders identify more clients, which can result in more credit offers for deserving borrowers.
Although VantageScore has been around since 2006, most lenders still rely on FICO. If you lose a loan because of poor credit, the lender will be required to notify you of which score(s) they used to make their decision.
Remember: your score isn’t as important as the data that goes into the score. If you’re going to spend time obsessing over your credit, obsess over your payment history—not a score