Remember all those decisions involving your credit? Chances are very high that the credit score involved was generated by a company called, FICO. FICO holds a true monopoly on credit-based decisions, being involved in around 90% of them. That said, there are over 1,000 scoring models in the US, and even FICO has multiple versions of its own scores.
When you hear about credit scores other than FICO, you will likely first hear about VantageScore.
VantageScore was developed in the early 2000s through a collaboration of the three major consumer reporting agencies in an effort to counter FICO’s dominance. While its early versions looked much like school grades and grading percentages (900 to 990 equated to an A, 800 to 890 equated to a B, etc.), VantageScore has not taken off with most lenders.
Other scores available through the credit bureaus would include the Experian Plus and the TransRisk scores, being similar in calculations and formatting to common FICO scores.
If you’ve ever seen the FICO scoring system, you may have wondered why it is so quirky. Let’s see if that is the case in our next segment.
