Which credit score is used the most

Credit scores determine the kinds of opportunities you can get in life and how much you pay to borrow money. There are different types of credit scores, so which one should you check? Learn which credit score is used the most by financial institutions and how you can monitor your credit rating.  

What Is a Credit Score?

A credit score is a three-digit numerical representation of your creditworthiness. Most credit scores range from 300 to 850 points. Scores get generated by a credit scoring model, such as the FICO credit scoring model. Credit bureaus use credit score models to understand your credit history accurately.  

High credit scores prove that consumers manage their money wisely and make good financial decisions. On the other hand, low credit scores indicate that the consumer is a credit risk. Borrowers with a good credit history tend to get better loan terms that help them save money. 

Understanding your credit score is crucial in order to gain financial power. Knowing how to manipulate different credit scores can help you work towards building a good credit rating in no time!  

What Are the Three Major Credit Bureaus?

A credit reporting agency, or credit bureau, is a company that collects information on a consumer’s financial activity. Financial information is organized in a credit report, which financial institutions and businesses can access to make qualifying decisions.  

There are three national credit bureaus in the United States: Experian, Equifax, and TransUnion. Each credit bureau keeps a credit report on each consumer. Still, the credit bureaus do not share information with each other. So each of your three credit reports will have different information.  

Every consumer is entitled to one free credit report every twelve months from each of the three credit bureaus. To get one or all of your free credit reports, you can do one of the following:

  • Visit the Annual Credit Report website
  • Call (877) 322-8228
  • Mail a request form to the Annual Credit Report Request Service
  • Visit the credit bureau website 

Checking your credit reports can help you monitor your financial health and better understand your credit position. 

What Are the Different Types of Credit Scores?

Credit bureaus use two main credit scoring models to calculate credit scores: FICO and VantageScore. Each type of credit score has different calculating factors and numerical ranges. Keep reading to learn the differences between FICO and VantageScore. 

FICO Score

The FICO score was first introduced in 1989 to help financial institutions make better-informed lending decisions. FICO scores are determined by five primary factors: your payment history, amounts owed, length of credit history, credit mix, and new credit.   

The Fair Isaac Corporation uses different scoring models to provide different credit scores. There is a base FICO score, but you also have a FICO Bankcard Score and FICO Auto Score. These additional credit scores help lenders better ascertain a borrower’s credit risk. The type of FICO credit score a financial institution uses varies. However, it may relate to the kind of loan you want to get. 

Your base FICO score helps calculate an industry-specific score with unique qualification requirements. A specific score can help a lender better understand your credit risk for certain loans. For example, an auto loan lender may want to see your FICO Auto Score to see how likely you are to make auto payments on time. Industry-specific scores weigh your credit history differently. While your base FICO score can range from 300 to 850 points, the FICO Auto Score ranges from 250 to 900.  

Credit Score Ranges for FICO Score 

A FICO score ranges from 300 to 850 points. Your credit rating depends on where your score falls within five distinct numerical categories.   

  • Exceptional – 800 to 850
  • Very Good – 740 to 799
  • Good – 670 to 739
  • Fair – 580 to 669
  • Poor – 300 to 579

Most financial institutions expect you to have a good credit rating or higher to qualify for a loan or credit card. According to the FICO score range, a good credit score is anything higher than 670 points.  

Five Factors for FICO Scores

There are five primary factors that affect your FICO credit score. Each factor counts for a small percentage of your overall FICO score.  

Payment History (35%)

Your payment history counts for 30% of your credit score. Payment history represents your reliability as a borrower. Making continuous on-time payments can significantly boost your credit score. But making even one late payment can decrease your score and result in a late fee. Late payments remain on credit reports for seven years, which can affect a lender’s qualifying decision. 

Signing up for automatic payments can help you improve your payment history on your credit report and prevent missed payments. Auto payments conveniently deduct the monthly debt amount from your bank or credit account!   

Amounts Owed (30%)

The amount of debt you owe to credit card issuers can improve or reduce your credit score. Using more than 30% of your credit limits can negatively affect your credit utilization rate. A utilization rate compares your total credit balance and the total credit limit of revolving accounts. Credit utilization is the second most important factor for credit, as it counts for 30% of your score.

Length of Credit History (15%)

The length of your credit history affects your credit score by 15%. The longer you keep financial accounts open, the better your credit score ends up being, especially if your payment history is excellent. Old accounts will greatly affect the average age of your credit accounts, which helps lenders better understand how you handle your finances. 

New Credit Inquiries (10%)

The number of times you apply for or open new credit accounts can alter your credit rating by 10%. Applying for too many loans or credit cards can signify to financial institutions that you cannot manage your money and are a high-risk borrower. For many lenders, more than six inquiries within a calendar year are too many. Often, many borrowers end up applying with multiple lenders because they have bad credit. But there are loans for people with bad credit!  

Credit Mix (10%)

A credit mix is the possession of both installment and revolving accounts. An installment account is a loan that provides a lump sum you repay monthly. A car loan and a personal loan are two examples of installment accounts. Revolving accounts, such as credit cards, provide a credit limit that allows for varying credit availability. Having different types of accounts can boost your credit, but it is unnecessary. 


VantageScore is a credit score developed in 2006 by the three major credit bureaus to compete against the FICO score. Scores typically range from 300 to 850 points and are calculated differently than the FICO score.

A high VantageScore indicates to financial institutions that you are a reliable borrower who pays on time and manages money wisely. But a low score shows that you may have trouble paying back the money you borrow. Qualification for loans is still possible with a low VantageScore, but the loan terms may not be ideal. 

VantageScores are calculated using one of two credit scoring models: VantageScore 3.0 and VantageScore 4.0. The most common model is VantageScore 3.0, even though VantageScore 4.0 came out in 2017. 

Credit Score Ranges for VantageScores

There are four credit score ranges for VantageScores, whereas FICO scores have five. Scores range from subprime (lowest) to superprime (highest). 

  • Super Prime – 781 to 850
  • Prime – 661 to 780
  • Near-Prime – 601 to 660
  • Subprime – 300 to 600

The benefit of VantageScores is that you can obtain the best credit rating if your score is 781 points or more. If the lender went by FICO scores, a 781 score would only rank as ‘very good’ —not ‘excellent.’ Most lenders expect prime scores, but you can still be eligible for emergency funding with near-prime or subprime credit. However, low credit scores may get higher interest rates to offset the credit risk. 

Five Factors for VantageScores

According to the VantageScore 3.0 credit model, five distinct factors affect credit score calculation. Each factor has a percentile weight, as shown below: 

  • Payment History – 41%
  • Depth of Credit – 20%
  • Credit Utilization – 20%
  • Balances – 11%
  • Recent Credit – 6%
  • Available Credit – 2%

Payment history is always the most important factor for credit scores, whether the lender uses FICO or VantageScores. You can achieve a high credit rating quickly by making continuous on-time payments.

How To Check Your Credit Score

Checking your credit score can help you track your financial progress and better understand your credit position. There are various ways to check your credit score for free, such as:

  • Check your loan or credit card statement
  • Purchase scores from one of the three credit bureaus
  • Use a free credit scoring website (Credit Karma, Credit Sesame, etc.).

The Bottom Line: The Most Used Credit Score

The two credit scores used the most by lenders include the FICO score and VantageScore. Each type of credit score has different categorical ranges and factors that affect the calculation. However, a consumer’s payment history is always the most critical factor for building an excellent credit rating. Setting up reminders and automatic payments can make it easier to pay bills on time.

The Complete Guide to Your VantageScore │VantageScore
What’s in my FICO® Scores?│Fair Isaac Corporation
What is a FICO® Auto Score? │Credit Karma