FICO, Experian, Vantage, oh my!
Credit scores can be very confusing, especially for first-time home buyers who may need a little help getting into the home of their dreams. Chances are when it comes to your credit, you’ve heard about FICO, and Experian, and Vantage, and more, but what do they all mean, and what are the differences?
What Are The Differences?
Well, credit scores are ways to evaluate your financial reputation, and you may have had hundreds of them over the years. Maybe each one is giving you a different number when you check your score. Well that’s because there are differences in how they’re calculated.
Why Are Your Scores Different?
First of all, Experian, TransUnion, and Equifax are the three main credit bureaus, and they all came together about a decade ago to create their own version of their credit score model called the VantageScore. However, each has different information about you, so even though they use the same model to gauge your score, all three can still give you a different result.
Your FICO Score
Then, there’s the FICO Score, which is the oldest and most widely-used scoring model allegedly used by 90% of top lenders to judge your worthiness. Now, this is the one that you hear most about in commercials and 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 in gaining in popularity.
How Do You Know Which One Is Best For You?
You can find out what kind of methodology your lender uses, but it’s always your best bet to keep your credit history clear and strong, so that you’re gonna come out with a higher score no matter what model is used to get your loan. For more information on regaining trust with lenders and ensure you put your best credit foot forward, be sure to check out this post.
If you’re ready to start the journey toward your new home in Nashville and need lender recommendations, I’d be happy to share my list you.