VantageScore vs. FICO Score: What’s the Difference?

If you monitor your credit using a free website, chances are, you’ve seen your VantageScore. However, you may not realize that this credit score is not your FICO score.

So what is a VantageScore credit score and how is it different from a FICO credit score? Is one better than the other? We’ll compare and contrast the two types of credit scores and discuss the merits of each in this article. 

What Is a Vantage Credit Score?

The VantageScore credit score, sometimes referred to as a “Vantage credit score,”  is a credit scoring model created in 2006 by the three major credit bureaus (Experian, TransUnion , and Equifax) to compete with FICO’s credit scoring models.

VantageScore is a tri-bureau credit score, meaning the exact same model is used at each credit bureau.

The most commonly used version of the VantageScore used by lenders today is the third iteration of the credit scoring model, VantageScore 3.0.

VantageScore Solutions, LLC has released VantageScore 4.0, which is supposed to be more accurate than previous versions, but since it takes lenders a long time to adopt new credit scoring models, most are still using VantageScore 3.0.

Who Uses VantageScore?

According to Experian, VantageScore is used by lenders for all types of loans except mortgages, where FICO is still the dominant player. The largest group of financial institutions that uses VantageScore is credit card issuers.

Non-financial institutions have also increasingly been adopting VantageScore, such as landlords and utility providers. 

VantageScore is also widely used by consumer websites that provide educational credit scores and market credit products.

What Is My Vantage Score?

It’s easy to find out what your VantageScore is for free. Credit Karma provides free VantageScore 3.0 credit scores from TransUnion and Equifax, so all you have to do is create an account on creditkarma.com and log in to your Credit Karma account to see your free Vantage credit score.

Credit Sesame and NerdWallet are other sites that provide consumers with free VantageScore 3.0 credit scores from TransUnion.

You can view your free VantageScore with TransUnion and Equifax on Credit Karma.

You can view your free VantageScore with TransUnion and Equifax on Credit Karma.

VantageScore vs. FICO Score

The primary difference between VantageScore and FICO scores is what they are used for. 

FICO scores have been in use for a longer period of time and, consequently, are most widely used by lenders to make lending decisions. According to U.S. News, FICO scores are used by 90 percent of “top lenders.”

While VantageScore credit scores are also used by some lenders, they are more well-known for their use as an educational tool.

Both FICO and VantageScore consider the same general categories of information from your credit report (although they use slightly different terms to describe them), which include:

Payment history
Utilization
Length of credit history/age
Mix of accounts/types of credit
New credit activity/recent credit

Since the scores share the same general categories, it is safe to assume that they will both be bolstered by the same common sense behaviors that lead to good credit, such as not using too much of your available credit and not missing payments. 

However, FICO and VantageScore assign slightly different weights to each category, as shown in the following table (percentage values are approximate).

FICO Score Factors
VantageScore Factors

Payment history, 35%
Payment history, 40%

Utilization, 30%
Credit utilization, 20%

Length of credit history, 15%
Age and type of credit, 21%

Mix of accounts, 10%
Balances, 11%

New credit activity, 10%
Recent credit, 5%

Available credit, 3%

FICO Credit Score Factors Pinterest graphic

FICO Score Factors

VantageScore Factors Pinterest graphic

VantageScore Factors

In addition, within these broader categories listed above, the scoring models have different ways of assigning value to certain variables. Here are a few examples.

Inquiries

Hard inquiries can generally hurt your score by a few points because seeking new credit is considered risky behavior. When people are applying for some types of loans, such as mortgages, auto loans, and student loans, they tend to apply for multiple loans so they can shop for the best rates. Credit scoring models now have different ways of accounting for this behavior so as not to punish consumers for shopping around.

Newer FICO scores group inquiries of the same type together within a 45-day window. That means consumers could apply for 5 auto loans within 45 days and it would only count as one inquiry. Older FICO scores do this within a 14-day window.

FICO scores only apply this rule to student loans, mortgages, and auto loans—not credit cards. According to creditcards.com, the FICO scoring model also includes a 30-day “buffer” against hard inquiries, which means it ignores any inquiries that occurred within the last 30 days.

In contrast, VantageScore groups all inquiries within a 14-day window, regardless of the type of account. You could apply for some credit cards, a student loan, a mortgage, and an auto loan within 14 days, and it would only count as one inquiry.

Collections

Unpaid collections are always going to make a significant dent in one’s credit score, but paid collections and collections with small balances are treated differently between FICO and VantageScore.

With FICO 8, the credit score most widely used by lenders today, all unpaid and paid collections are damaging, regardless of the type of account. FICO 9, the newest FICO score, leaves out paid collection accounts and reduces the impact of unpaid medical collections specifically. Both FICO 8 and FICO 9 disregard collections when the original balance was less than $100.

VantageScore 3.0 and 4.0 are similar to FICO 9 in that they don’t count paid collection accounts and assign less importance to medical collections, but they do not make exceptions for collections with low balances.

Utilization

While utilization is treated fairly similarly with both scoring models, the specific thresholds that affect credit scores vary. VantageScore recommends keeping your credit utilization below 30%, while many experts believe that FICO scores suffer at lower utilization ratios.

Interestingly, the newer VantageScore 4.0 looks at the trends in your utilization over time, such as whether your balances have increased or decreased. FICO scores and previous VantageScore versions only look at the data that is in your credit report at the moment when your score is calculated and do not look “back in time.”

Other Differences Between VantageScore vs. FICO

Tri-bureau vs. single-bureau

With FICO, each credit bureau uses a different version of the score that is specific to that bureau. As a result, consumers often have different credit scores for each credit bureau.

VantageScore, however, was designed to work the same for all three credit bureaus in an effort to reduce the disparity in scores between credit bureaus.

Who can be scored

The two types of scoring models have different requirements for who can be scored.

FICO requires at least six months of credit history and at least one account reported within the last six months. That means if you’re just starting out in building credit, you’ll need to wait six months after opening your first account to establish a FICO score.

On the other hand, VantageScore is able to score consumers with only one month of credit history on at least one account reported within the last 24 months.

Credit score scale

Previous versions of VantageScore had a scale that was different from the scale that the FICO score uses. For example, VantageScore 2.0 ranged from 501-990. The VantageScore 3.0 range was changed to match the FICO credit score scale of 300-850.

However, they have slightly different rating scales within those credit score ranges, as you can see in the table below.

FICO Score
VantageScore 3.0

Credit Score
Rating
Credit Score
Rating

300-579
Very Poor
300-499
Very Poor

580-669
Fair
500-600
Poor

670-739
Good
601-660
Fair

740-799
Very Good
661-780
Good

800-850
Exceptional
781-850
Excellent

What Is a Good Vantage Score?

From the table above, we can see that a good VantageScore is between 661 and 780. Compare this to FICO’s good credit score rating, which is a narrower range of scores from 670 to 739. 

720 would be considered a good credit score with both FICO and VantageScore. Photo by CafeCredit.com, CC 2.0.

720 would be considered a good credit score with both FICO and VantageScore. Photo by CafeCredit.com, CC 2.0.

Similarly, an excellent VantageScore credit score ranges from 781 to 850, while FICO’s “exceptional” credit rating ranges from 800 to 850.

Is There a VantageScore to FICO Conversion Formula?

Unfortunately, there is no Vantage to FICO conversion formula that can be used to calculate your FICO score from your VantageScore and vice versa. 

As we learned in our comparison of VantageScore vs. FICO scores, the two scoring models assign different values to each credit score category and even have slightly different categories.

They also use different proprietary algorithms, the details of which are carefully guarded trade secrets.

To make things even more complicated, both FICO and VantageScore utilize “scorecards” or “buckets” to categorize consumers. Each scorecard has a different way of scoring consumers. In other words, the specifics of the credit score algorithms vary for different consumers even within the same version of a credit score.

Since each credit score is so complex and we as consumers do not have access to the secret algorithms, there is no reliable or accurate way of converting between the two. 

Why Is My Vantage Score Lower Than FICO?

Since VantageScore and FICO scores differ in the weights they assign to each category and variable within the scoring model, it is likely that one will usually be lower than the other. 

Since payment history is weighted more heavily with VantageScore than FICO (40% vs. 35%, respectively), a missed payment could bring your VantageScore down a bit more than your FICO score.

Another reason for having a lower VantageScore could be having unpaid low-balance collections on your credit report, which hurt your VantageScore but not your FICO 8 or 9 score.

However, what people tend to see more commonly is that their VantageScore is slightly higher than their FICO score because VantageScore seems to be more forgiving when it comes to credit utilization.

Which Credit Score Is Better?

Unfortunately, there is no straightforward answer to the question of which credit score is superior to the other. Each credit score has value for its respective purposes.

Although some people dismiss VantageScore as being a “fake” or inaccurate version of a FICO score, that’s not necessarily a fair comparison. Although both scores emphasize the same general credit principles, they have significant differences in the ways they treat certain factors. VantageScore is intended to be a competitor to FICO, not an exact replicate, so we shouldn’t expect them to be the same.

Since the same general principles shape how both scores work, however, oftentimes what helps one will help the other. This is why VantageScore has been so successful as an educational score offered by many free sites despite its differences from FICO.

While consumers may often have to pay to get their FICO score, they can monitor their credit and get a good idea of what is affecting their score for free using consumer websites that employ VantageScore. They can then take action that will help improve both their VantageScore and their FICO score.

Therefore, for general credit-building purposes, VantageScore is just as useful as FICO.

That said, it is important to keep in mind that most lenders still use FICO scores and many use earlier versions of FICO, which may be less comparable to VantageScore credit scores. If you are applying for a mortgage soon, for example, you’ll probably want to pull your FICO score in addition to your VantageScore, since mortgage lenders overwhelmingly use FICO in their lending decisions.

VantageScore and FICO scores are both important to get to know as a consumer, especially as VantageScore gradually becomes more popular with lenders. 

What do you think about the VantageScore credit score? Have you compared yours to your FICO score? We’d love to hear your thoughts in the comments.

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How to Get an 850 Credit Score

People who are serious about improving their credit often wonder what it takes to get the highest possible credit score. For the FICO 8 credit scoring model, the perfect credit score is an 850. Only 1.2% of consumers have the elusive 850 credit score.

There are many other credit scoring models that are used for different purposes and may have different credit scoring ranges. However, since FICO 8 is the most commonly used credit score, we will use 850 as the benchmark for the ideal credit score.

Keep reading for our tips and tricks for getting the highest credit score possible: the coveted 850 credit score.

Payment History — 35%
Most people who have an 850 credit score have seven years of on-time payment history with no lates.

Most people who have an 850 credit score have seven years of perfect payment history.

Your payment history is the biggest slice of the credit score pie, so even one late payment or missed payment can significantly affect your score. Negative items can stay on your credit report for up to seven years, so if you miss a payment, you may not be able to achieve a perfect 850 credit score until at least seven years have passed!

To safeguard against the possibility of forgetting to make a payment, consider setting up automatic bill pay for all of your accounts. Be sure to continue to check your accounts regularly in case of any system errors.

If you do miss a deadline once in a blue moon but have otherwise been an upstanding customer, try negotiating with your creditor to see if they will forgive the late payment and wipe it from your record.

FICO says that 96% of “high achievers,” or those with FICO scores above 785, have no missed payments on their credit report.

Essentially, to get an 850 credit score, you just need to follow one simple strategy: make all of your payments on time for a long time. We will further discuss the connection between payment history and time in the “Length of Credit History” section below.

Credit Utilization/How Much You Owe — 30%

The amount of debt you owe compared to your total credit limit is your credit utilization ratio. To get a perfect credit score, you’ll want to keep this ratio as low as possible, both overall and on each of your individual tradelines.

According to Experian, “Among consumers with FICO credit scores of 850, the average utilization rate is 5.8%.”

A study by VantageScore and MagnifyMoney found that people with the best credit scores and people with the worst credit scores actually had similar amounts of outstanding debt. However, those with the best scores had an average total credit limit of $46,700—16 times the credit limit of those with the worst scores!

Therefore, for the high scorers, that outstanding debt made up a much smaller percentage of their total available credit than those with low credit limits and poor scores, which highlights the importance of the overall utilization ratio.

This study reported that the average credit card user has an overall utilization ratio of 20%, which is generally considered to be a safe number for maintaining decent credit. To become someone who has an 850 credit score, however, you’ll need to keep it around 5% or lower.

While consumers with 850 credit scores do use credit cards, they tend to keep their utilization ratios around 5% or lower.

While consumers with 850 credit scores do use credit cards, they tend to keep their utilization ratios around 5% or lower. Photo by Ellen Johnson.

In addition, keep in mind that even if you have a low overall utilization ratio, individual cards with high utilization could still bring down your score.

As a hypothetical example, let’s say you have two cards: one with a $10,000 limit and a $0 balance and the other with a $1,000 limit and a $900 balance. Your total available credit is $10,000 + $1,000 = $11,000 and your total debt is $900. Therefore, your overall utilization ratio is $900 / $11,000 = 8% utilization, which is a very good number.

However, your account with the $1,000 limit has a 90% individual utilization ratio! Since you only have two accounts, that means 50% of your accounts have high utilization, and that could negatively affect your credit. According to creditcards.com, maxing out just one credit card can reduce your score by as many as 45 points.

To get around this problem, if you have any individual cards with high utilization, consider transferring the balance to other accounts to keep the utilization ratio on each account as low as possible.

You could also request credit line increases from your creditors, which could lower your utilization ratios and benefit your score.

Another way to help with overall utilization is to add low-utilization tradelines to your credit file.

Length of Credit History (Age) — 15%

This category takes into account age-related factors such as the average age of your accounts, the age of your oldest account, and the ratio of seasoned to non-seasoned tradelines. (A seasoned tradeline is at least two years old, which is when the account is believed to have a more positive impact on your credit score.)

The more age your accounts have, the more they will help your credit score.

Age goes hand-in-hand with payment history, because the more age an account has, the more time it has had to build up a positive or negative payment history. Together, age (15%) and payment history (35%) make up 50% of your credit score, which shows how important it is to open accounts early and make every single payment on time.

This is also why we always say that focusing on age is the #1 secret to unlocking the power of tradelines.

According to FICO, the age of the oldest account of people who have 650 credit scores is only 12 years, compared to 25 years for people who have credit scores above 800. In addition, individuals with fair credit have an average age of accounts of 7 years, compared to 11 years for those with excellent credit.

Cultivating an 850 credit score takes years of maintaining a positive credit history.

Cultivating an 850 credit score takes years of maintaining a positive credit history.

CreditKarma reports that a 2011 study found the average length of credit history for consumers with 850 credit scores to be 30 years.

We have an in-depth discussion of which age tiers are most significant in our article, “Why Age Is the Most Valuable Factor of a Tradeline,” but the bottom line for getting the best credit score is simply to get as much age as possible. Seasoned tradelines can help by extending the age of the oldest account and the average age of accounts.

Maximizing this factor also means not closing old accounts, because their age could be helping your score. To ensure old, dormant accounts don’t get automatically closed by the banks for inactivity, try to use them at least few times a year.

Also, keep in mind that it may be impossible to achieve an 850 credit score without a certain amount of age, even if you do everything else perfectly. So if you have stellar credit habits but haven’t yet been able to join the 850 credit club, you may just need to wait patiently.

Credit Mix — 10%

While the mix of credit is one of the least important factors in a credit score, to get a perfect credit score of 850, you may still need to optimize this factor.

In this category, credit scores reward having a balanced mix of several different accounts, including both revolving credit and installment loans. This is because creditors want to see that you can successfully manage a variety of different types of credit.

As an example, a credit file that includes an auto loan, a mortgage, and two credit cards has a better credit mix than a credit file that has four accounts that are all credit cards.

About the “credit mix” credit score factor, FICO says, “Having credit cards and installment loans with a good credit history will raise your FICO Scores. People with no credit cards tend to be viewed as a higher risk than people who have managed credit cards responsibly.”

The total number of accounts is also considered, with more accounts generally being better, up to a certain point.

FICO also states that high score achievers have an average of seven credit card accounts in their credit files, whether open or closed.

Auto loans are common among people who have 850 credit scores.

Auto loans are common among people who have 850 credit scores.

If you are looking to improve your credit mix statistics, adding authorized user tradelines can increase the total number of accounts and help diversify one’s credit file.

850 scorers also have installment loans in their credit files. According to Experian, the average mortgage debt for consumers with exceptional credit scores (800 or above) is $208,617. In addition, people who have FICO scores of 850 have an average auto-loan debt of $17,030.

Experian says, “In every other debt category except mortgage and personal loan, people with perfect scores had more open tradelines but less debt than their counterparts with average scores—underscoring the value of being able to manage debt while having numerous credit accounts.”

New Credit — 10%

The “new credit” category of your credit score refers to how frequently you shop for new credit. This includes opening up new credit cards and applying for loans, for example. This “new credit” activity is reflected in the number of inquiries on your credit report.

Since seeking new credit makes you look like a higher risk to creditors, each hard inquiry has the potential to drop your score by a few points. Therefore, if you are going for the enviable 850, it’s best to avoid applying for new credit for a while.

If you need to shop for an auto loan or mortgage, be sure to complete all your applications within a two-week window in order for all of the credit pulls to count as one inquiry. For credit cards, however, each inquiry will be typically be counted individually.

Fortunately, inquiries only remain on your credit report for two years, and FICO scores only consider inquiries that occurred within the past year, so it shouldn’t take long for your credit to recover if you do have new credit inquiries on your report.

More Tips on How to Get an 850 Credit Score

In addition to optimizing each of the above five categories that factor into your credit score, it is also important to regularly check your credit reports and dispute inaccurate information.

In addition, those with very high credit scores rarely have serious delinquencies or public records on their credit reports, such as bankruptcies or liens. Obviously, this will be easy to avoid if you follow all of the suggestions above, but if you already have a messy credit history in your past, it could take up to 7-10 years to recover enough to get an 850 credit score.

850 Credit Score Benefits

What are the benefits of being in the 850 credit club? In reality, you’ll be able to take advantage of the benefits of having an excellent credit score whether you have a 760 credit score or an 850 credit score. You don’t need to score a perfect 850 to get the best credit cards or the best interest rates on loans.

That said, the main benefit of having the best possible credit score is bragging rights.

Final Thoughts on How to Get the Perfect Credit Score

While it’s probably not necessary to get an 850 credit score, it is smart to work toward that goal by managing your credit wisely, which will eventually get you into the upper levels of high credit score achievers.

The most important factors of your credit score are payment history, utilization, and age. Therefore, to keep your credit in pristine condition, you’ll need to make all of your payments on time, keep your utilization as low as possible, and maximize your credit age. Beyond that, you’ll also want to maintain a balanced mix of accounts and minimize new credit inquiries.

How to Get an 850 Credit Score Pinterest graphic

Finally, take advantage of your three annual free credit reports to make sure your credit reports are free of damaging errors.

To summarize, here’s an example of what the credit profile of someone who has an 850 credit score might look like:

No missed payments or delinquencies within the past seven years
A high total credit limit
The overall utilization ratio is 5% or lower
Individual credit cards each have low utilization, around 5% or lower
The oldest account is likely about 25-30 years old
The average age of accounts is at least 11 years
Typically has at least seven credit card accounts (whether open or closed)
Usually has an auto loan and/or a mortgage loan
May have additional installment loans
No inquiries within the past year
No damaging errors on their credit report

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What Are Credit Scores and How Can Tradelines Help?

What Are Credit Scores and How Can Tradelines Help? Pinterest graphicWhen it comes to credit scores, there’s a lot of confusion and misinformation out there. Our credit scores impact our lives in more ways than you might think, yet, unfortunately, they are complicated and difficult to understand. In this article, we’ll clear up what credit scores are, why they matter, how to build credit, and how to improve your credit score.

What Is a Credit Score?

A credit score is a 3-digit number that is meant to represent your credit risk, or how likely you are to default on a loan. This credit rating is calculated based on the information in your credit report, which lists your current and recent credit accounts.

To use an analogy, your credit report is like your school transcript: it is a list of your current and recent credit accounts and how well you did in paying them off on time. Your credit score rating is like your overall GPA: it sums up all of that credit history information into a single number.

While there are many different versions of credit scores, most lenders use a FICO credit score. Another credit score, called the VantageScore, was developed by the three major credit bureaus: Equifax, Experian, and TransUnion. The VantageScore is primarily used for educational purposes rather than lending decisions.

Both the VantageScore and the FICO credit scores range from a low of 300 to the highest score of 850. Lower numbers represent a higher likelihood of defaulting on a loan, which is considered bad credit, while higher numbers represent a lower likelihood of defaulting on a loan, which is considered good credit.

Why Is Your Credit Score Important?

If you ever want to buy something using credit instead of cash—a house or a car, for example—you’ll likely want to have a good credit score. Your credit score is what lenders use to decide whether or not they should loan you money and what the terms of that loan should be.

If you have a bad credit score or no credit score at all, you may have a hard time getting credit from lenders.

If you have a bad credit score or no credit score at all, you may have a hard time getting credit from lenders.

If you don’t have a credit score or credit history at all, lenders don’t have a way of judging your creditworthiness. Therefore, they may see you as too much of a risk and decline your request for credit.

If you do have a credit score, lenders will see it as a representation of how risky it is to lend money to you. A great credit score means you are a low-risk borrower, which means lenders can offer you low interest rates and other perks, such as credit card rewards.

On the other hand, a low credit score represents a high risk to lenders, since it shows that you may be more likely to default on a loan. To compensate for the higher risk of default, lenders charge higher interest rates and fees to those with poor credit scores—if they are willing to extend credit at all.

Your credit score doesn’t just affect your access to credit and the costs associated with using credit. Credit scores have increasingly been used for a variety of non-credit applications.

Phone carriers and utility providers may require a security deposit based on the results of your credit check.

Phone carriers and utility providers may require a security deposit based on the results of your credit check.

A significant percentage of employers do credit checks on prospective employees, so a bad credit score could cost you your dream job.
Your credit score may affect what you pay for insurance, so you’ll want to have a good credit score if you want to get the best insurance rates.
Landlords often check credit scores of applicants to see how reliable they are in paying their bills.
Utility providers and even cell phone carriers may check your credit score to determine whether to charge you a security deposit upfront.

As you can see, credit scores affect a lot more than just your ability to get credit, and it is more important than ever to prioritize building your credit score.

What Factors Determine Credit Scores?

Although the specific algorithms behind credit scores are closely-guarded trade secrets, the general categories that affect credit scores are widely known. In general, here’s what makes up a credit score:

Payment history: 35%. This is the most important piece of your credit score, so even one late or missed payment can do a lot of damage.
Utilization (how much you owe): 30%. Your utilization ratio is the ratio of the amount of debt on all your revolving accounts (e.g. credit cards) to your total available revolving credit, expressed as a percentage. Credit scores may account for both your overall utilization ratio and the utilization ratio of each individual tradeline. The lower your utilization, the better for your credit score.
Length of credit history: 15%. This category considers factors like your average age of accounts, the age of the oldest account in your credit file, and the ratio of “seasoned” to non-seasoned tradelines. A seasoned tradeline is defined as one that is at least two years old, at which point it is believed that the account begins to have a more positive impact on your credit score. The more age your accounts have, the more they will help your credit score.
The five factors that affect your credit score by Tradeline Supply Company, LLC

These five main factors affect your credit score.

Credit mix: 10%. Creditors want to see that you can responsibly use different types of credit, so they look for a variety of accounts in your credit report, including both revolving credit accounts and installment loans.
New credit: 10%. This credit score category takes into account any new inquiries and new accounts that you have added in the past 6 to 12 months. Creditors consider seeking new credit a risky behavior, so inquiries can hurt your score. Opening a new account can also have a temporary negative effect on your score since it has no age or payment history.

What Is a Good Credit Score?

Scores between 670 and above are considered good credit scores. Very good credit scores lie between 740 and 799 while excellent credit scores include scores of 800 and above.

Which credit score is the best? Only about 1% of Americans have the coveted 850, a perfect credit score.

Credit scores range between 300 and 850, with 850 being the best credit score possible.

Credit scores range between 300 and 850, with 850 being the best credit score possible.

How to Get a Good Credit Score
The most important factor of a good credit score is a history of on-time payments.

The most important factor of a good credit score is a history of on-time payments.

Here are some things that can help you get a good credit score:

A history of on-time payments
Low utilization ratios
Accounts that are at least 2 years old
A mix of different revolving and installment accounts
Minimal inquiries
Monitoring your credit report for errors

Learn more about how to increase your credit score with do-it-yourself credit repair strategies and our guide to how to get an 850 credit score.

What Is a Bad Credit Score?

According to Investopedia, credit scores of 579 or below are considered bad credit scores, with 61% of borrowers in this credit score range being predicted to become delinquent on future loans.

Credit scores in the range between 580 and 669 are considered fair because only 28% of these borrowers are predicted to become delinquent on future loans. Unfortunately, even those with fair credit scores often have difficulty getting credit and higher interest rates than those with good or excellent credit scores.

Bad credit scores can have serious consequences that reach farther than just your finances. For more on bad credit, its effects, and how to fix it, check out our article on bad credit.

Here are some things that can lead to a bad credit score:

Having too much debt can drag down your credit score.

Having too much debt can bring down your credit score.

Late or missed payments
High credit card balances
Low account age
Not enough accounts
Too many inquiries
Collections
Judgments
Foreclosure
Bankruptcy
Identity theft

How to Build Credit

To build credit, you’ll need to open your own credit accounts and keep them in good standing by always making payments on time. This is the foundation of a good credit score.

Once you build credit by piggybacking, you can open your own accounts to continue building your credit score.

Once you build credit by piggybacking, you can open your own accounts to continue building your credit score.

However, as we mentioned, it can be difficult to start building credit since lenders typically want to see a credit score and credit history before extending credit.

The fastest way to build credit, especially for those who have a limited credit history, is to piggyback on the credit of someone else. Examples of credit piggybacking include getting a cosigner or guarantor in order to qualify for credit, opening a joint account with someone, or being added as an authorized user.

Once you have started to establish a credit history by piggybacking, you can continue to build up your credit by opening up more tradelines. You can also add tradelines to your credit file that already have years of perfect payment history to help balance out the effects of any derogatory accounts.

Remember, tradelines are the foundation of building credit because all credit starts with tradelines.

How to Improve Your Credit Score

If you need to fix your credit score, there are some strategies you can use to repair your credit score yourself, such as disputing errors on your credit report and paying down high credit card balances.

Since payment history makes up the majority of your credit score, the most important thing is to get all of your accounts current and make sure to make all payments on time in the future, and your credit score should gradually recover.

When it comes to boosting your credit score, lasting results will require patience, good financial practices, and knowledge of how the credit system works. Use our free educational resources to learn more about credit scores, building credit, and how tradelines can help add credit history to your credit report.

Ready to buy tradelines? See our updated tradeline list now.

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