Credit Score Differences

As mentioned in previous BoldText articles, each of the credit scores derived from the different scoring models may be a little different due to the formulas that are used to get the numerical figure of your score.  In addition to each credit model having different ranges that the scores fall within, there are a multitude of other differences between the credit score types that might interest you.

NextGen Vs. Classic FICO

The two oldest credit score models, NextGen and Classic FICO have a few differences.  The NextGen FICO score almost always gives individuals a higher credit score than the Classic FICO.  The ranges of scores in NextGen are between 150 and 950 (compared to the 300-850 range of Classic FICO). 

The NextGen scores are higher for a few reasons.  First of all, collection items under $100 are not included in NextGen figures, things like parking tickets and fines from libraries for items not returned.  Multiple inquiries from certain situations, like mortgages and automobile loans are necessary for individuals to obtain the best interest rates.  Under the Classic FICO scoring model, you have 14 days to make multiple inquiries for these loans for them to be treated as a single inquiry; the NextGen FICO score gives you up to 45 days to shop around for the best rates on these loan products and have it treated as a single inquiry to your credit report.

Consumers under the Classic FICO score model are placed into one of 10 groups based on their credit scores, while NextGen divides consumers into 18 groups.  It is felt that more groups classifies less people as a credit risk so that more people are shown as a good credit risk.

Under the Classic FICO scoring model, accounts that are less than 6 months old are not even considered in the score, while under the NextGen scoring model, any account over 3 months old is taken into consideration.  This is especially helpful to individuals who are working to improve their credit, who may have made late payments in the past and are working hard to make all payments on new accounts on time.

Accounts with finance companies are not considered negative items under the NextGen scoring model, but are negative items when used in the Classic FICO scoring model.

Over 55% of consumers have a higher score with NextGen than they do with Classic FICO.

VantageScore VS FICO Score

VantageScore is still a very new scoring model, and there is very little published in regards to the numerical formula that is used to obtain the VantageScore.  What is known, however, is that the VantageScore uses most of the same information as the FICO score and the scores will be derived from looking at the past 2 years of financial information in the credit reports.

Multiple inquiries on mortgage and auto loans will have a 14 day period where each inquiry will be treated as a single inquiry so that your score is not reduced from having a large number of inquiries on these items that consumers must shop around in order to get the best rates and cannot do so without allowing each company to access the credit report.

The VantageScore is supposed to help individuals have scores that are unable to under the current FICO score models, such as consumers who are deceased, consumers who do not have present accounts in their credit report, and consumers with no information added to their credit reports in 2 years.