There are a few different credit bureaus that calculate credit scores based on historical payment data they collect. FICO scores have been around for decades, and are widely used in the financial industry. The three major credit bureaus, TransUnion, Experian and Equifax, collectively created the VantageScore credit scoring model, which has gained popularity and increased in prevalence in recent years.
Some online lenders like CashNetUSA use alternative methods to review your credit, and recent positive credit behavior may help improve your chances of getting approved for a loan. This means that you may qualify for a CashNetUSA loan even if you’ve been declined by other lenders.
While FICO and VantageScore both use historical payment data to calculate credit scores, their scoring methods vary. This means that the factors affecting your credit scores, including payment history, type(s) of credit, age of account(s), credit utilization, new credit and recent inquiries, are measured differently between the FICO and VantageScore score algorithms. For example, FICO credit scores are comprised of five sections, with each portion representing a percentage of your credit score: Payment history (35%), amount owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%). On the other hand, VantageScore does not provide an exact percentage of how each factor affects your score. VantageScore credit scores are calculated using data from six sections, listed here in the order of the highest impact on your score to the least: Payment history; credit usage ratio; age and type of credit; total balances and debt; available credit and recent inquiries and credit behavior.1
Additionally, the data provided to each credit bureau may also differ. Because of the differences across FICO and VantageScore, your credit scores can vary. It’s a good idea to regularly check both your FICO and VantageScore credit scores.
References
1Brozic, J. (2021). VantageScore vs. FICO: What’s the difference?
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