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Understanding Credit Scores & What Counts: FICO vs. VantageScore

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Credit scores have become as important to our financial well being as our employment status and income. They influence everything from access to credit, interest rates, insurance premiums, housing, and deposit requirements on utilities. In order to maximize your credit scores you have to first understand what they consider.

Understanding Credit Scores

In the world of credit there are hundreds of different credit scores, too many to easily track and manage.  That’s the bad news.  The good news is that every single credit score is driven solely off the information from your credit reports, and you only have three of those.

The two most widely recognized credit scoring models are the FICO and VantageScore. Both the FICO and VantageScore credit scoring systems consider the same items, albeit slightly differently.  The following is a complete list of what commonly used credit scores consider, and how much weight it’s given.

Payment History

This is actually better titled as “The Presence or Lack of Derogatory Credit Information.” In the FICO scoring system this category is worth 35% percent of your score points.  In the VantageScore scoring system it’s worth 40%. Any presence of late payments, charge offs, defaults, settlements, foreclosures, repossessions, tax liens, judgments, bankruptcy or collections fall in this category. Avoiding these problems is a must if you expect to max out your credit scores.

Debt Burden

The debt burden category, for some reason, is misinterpreted as only containing one measurement…the infamous credit card debt-to-credit limit ratio. That’s incorrect.  There are several debt related metrics that fall into this category including the number of accounts with balances and the types of accounts with balances. In the FICO scoring system this category is worth 30% percent of your score points.  In the VantageScore scoring system it’s worth 34%. The safe harbor for this category would be to have as little credit card debt as possible.

Time in File

Time in file is a fancy way of saying, “the age of your credit reports.” In the FICO scoring system this category is worth 15% percent of your score points.  In the VantageScore scoring system considered to be highly influential.  This category measures the average age of all of the accounts on your credit reports and the age of the oldest account.


I spend way too much time talking about inquiries especially considering the fact that they’re only worth 10% of the points in your FICO score and no more than 5% in the VantageScore scoring system. Inquiries are a record of a lender pulling your credit report in response to you asking them for something, like an extension of credit or a credit limit increase.

Account Diversity

According to VantageScore Solutions, “Maintain a mix of accounts over time to improve your score.”  This mix includes things like credit cards, auto loans and mortgages.  This category is worth 10% of the points in your FICO score.

Earning and maintaining great credit scores is actually very easy. If you never miss payments, maintain modest credit card debt and avoid excessive credit shopping stints then your credit scores will always be at or above 800. This means you’ll always qualify for the best deals and terms from mainstream lenders.

More on Credit Scores:

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