Models for Credit Scoring


Download a Printable Version

There are three major credit bureaus: Experian, Equifax and Transunion. Each credit bureau administers its own credit report and score. Credit scores from each bureau are unique as they can contain different information regarding repayment history on your accounts. Take look at the 3 different scoring models:

  1. FICO Credit Score. Started providing credit scores in 1989, FICO stands for Fair Isaac Corporation and is the most popular type of credit score. It’s been updated over the years to include more than 50 kinds of credit scores. One type, for example—the FICO Score 9—adds rental payment history and minimizes the impact of unpaid medical bills and paid collections.
  2. VantageScore. Dubbed as an alternative to the FICO score, you can get a VantageScore from Equifax, TransUnion, or Experian. Its goal is to keep up with changing behavioral trends, innovation, and advances in the availability of data related to your payment history. This particular method can take into account how you pay normal bills such as utilities, cell phones or cable and can be beneficial if you have a thin credit file. Model developers, such as the VantageScore, update scoring models regularly to ensure they are as predictive as possible.
  3. Custom Scores. Lenders can also create their own models for credit scoring and can choose to put more or less emphasis on certain types of credit. As an example, if you are applying for a credit card, the lender will place more emphasis on your payment history with other credit card companies and less emphasis on other lines of credit.

These are the three most common of credit scoring models used. Do you know which scoring method your lender uses to determine your creditworthiness?