Credit scores can be very confusing, especially for the first-time homebuyers who may need a little help getting into the home they are actually dreaming about. Chances are, when it comes to credit, you’ve heard about FICO and Experian and Vantage and more. But what do they all mean? And what are the differences of them?
Well, credit scores are ways to evaluate your financial reputation. You may have hundreds of them, and yes, there are differences in how they can be calculated. First of all, Experian, TransUnion, and Equifax are the three main credit bureaus, and they came together about a decade or so ago to create their own version of a credit score model called VantageScore. However, each have different information about you. Therefore, even though they use the same model to gauge your score, all three could still get a different result.
Then there’s the FICO score, which is the oldest and most widely used scoring model. Allegedly used by about 90% of top lenders to judge your worthiness, your creditworthiness, this is the one that you hear about in most commercials, and that is usually offered to you monthly by your credit card provider. In essence, FICO is like Google or Amazon, but Vantage still has market share and is gaining in popularity.
So, how do you know which one is best for you? You can find out what kind of methodology your lender uses, but best bet is to keep your credit history clear and strong, so that you’ll come out with a high score, no matter what model is used to get your loan. For more information on regaining trust with lenders and ensuring you’ve put your best credit foot forward, be sure to click below and watch the other video on three secrets to better credit.