Experian Credit Score vs. FICO Score

A young women reclines on a couch and smiles at the phone in her hand.

When you think “credit score,” you probably think “FICO.” The Fair Isaac Corporation introduced its FICO scoring system in 1989, and it has since become one of the best-known and most-used credit scoring models in the United States. But it isn’t the only model on the market.

Another popular option is called VantageScore, the product of a collaboration between the three major credit reporting agencies: Experian, Equifax, and TransUnion. It uses similar scoring methods to FICO but yields slightly different results.

Each scoring model has multiple versions and multiple applications—you don’t have just one FICO score or one VantageScore. Depending on which bureau creates the score and what type of agency is asking for the score, your credit score will vary, sometimes siginifcantly. One credit score isn’t more “accurate” than another, they just have different applications. Learn more about the different types of credit scores below.

When you sign up for ExtraCredit, you can see 28 of your FICO scores from all three credit bureaus. Your free Credit Report Card, on the other hand, will show you your Experian VantageScore 3.0.

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What Is a VantageScore?

VantageScore was created by the three major credit reporting agencies—Experian, Equifax, and TransUnion. It uses similar scoring methods to FICO but yields slightly different results.

One of the primary goals of VantageScore is to provide a model that is used the same way by all three credit bureaus. That would limit some of the disparity between your three major credit scores. In contrast, FICO models provide a slightly different calculation for each credit bureau, which can create more differences in your scores.

FICO vs. VantageScore

So, what are the differences between an Experian credit score calculated using VantageScore and one calculated via the FICO model? More importantly, does the score used matter to you, the consumer? The answer is usually no. But you might want to look at different scores for different needs or goals.

Is Experian Accurate?

Credit scores from the credit bureaus are only as accurate as the information provided to the bureau. Check your credit report to ensure all the information is correct. If it is, your Experian credit scores are accurate. If your credit report is not accurate, you’ll want to look into your credit repair options.

Our free Credit Report Card offers the Experian VantageScore 3.0 so you can check it regularly. If you want to dig in deeper, you can sign up for ExtraCredit. For $24.99 per month, you can see 28 of your FICO scores from all three credit bureaus. ExtraCredit also offers rent and utility reporting, identity monitoring and theft insurance, and more.

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Understanding the Scoring Models

FICO and VantageScore aren’t the only scoring models on the market. Lenders use a multitude of scoring methods to determine your creditworthiness and make decisions about whether or not to give you credit. Despite the numerous options, FICO scores and VantageScores are likely the only scores you’ll ever see yourself.

Here’s what FICO uses to determine your credit score:

  • Payment history. Whether or not you pay your bills in a timely manner is critical, as this factor makes up around 35% of your score.
  • Credit usage. How much of your open credit you have used—which is called credit utilization—accounts for 30% of your score. Keeping your utilization below 30% can help you keep your credits core healthy.
  • Length of credit. The average age of your credit—and how long you’ve had your oldest account—is a factor. Credit age accounts for around 15% of your score.
  • Types of credit. Your credit mix, which refers to having multiple types of accounts, makes up around 10% of your score.
  • Recent inquiries. How many entities have hit your credit history with a hard inquiry for the purpose of evaluating you for credit is a factor for your score. It accounts for about 10% of your credit score.

VantageScore uses the same factors, but weighs them a little differently. Your VantageScore 4.0 will be most influenced by your credit usage, followed by your credit mix. Payment history is only “moderately influential,” while credit age and recent inquiries are less influential.

Each company also gathers its data differently. FICO bases its scoring model on credit data from millions of consumers analyzed at the same time. It gathers credit reports from the three major credit bureaus and analyzes anonymous consumer data to generate a scoring model specific to each bureau. VantageScore, on the other hand, uses a combined set of consumer credit files, also obtained from the three major credit bureaus, to come up with a single formula.

Both FICO and VantageScore issue scores ranging from 300 to 850. In the past, VantageScore used a score range of 501 to 990, but the score range was adjusted with VantageScore 3.0. Having numerical ranges that are somewhat consistent helps make the credit score process less confusing for consumers and lenders.

Your score may also differ across the credit bureaus because your creditors aren’t required to report to all three. They may report to only one or two of them, meaning each bureau likely has slightly different information about you.

Variations in Scoring Requirements

If you don’t have a long credit history, VantageScore is the score you want to monitor. To establish your credit score, FICO requires at least six months of credit history and at least one account reported to a credit bureau within the last six months. VantageScore only requires one month of history and one account reported within the past two years.

Because VantageScore uses a shorter credit history and a longer period for reported accounts, it’s able to issue credit ratings to millions of consumers who wouldn’t yet have a FICO Score. So, if you’re new to credit or haven’t been using it recently, VantageScore can help prove your trustworthiness before FICO has enough data to issue you a score.

The Significance of Late Payments

A history of late payments impacts both your FICO score and your VantageScore. Both models consider the following.

  • How recently the last late payment occurred
  • How many of your accounts have had late payments
  • How many payments you’ve missed on an account

FICO treats all late payments the same. VantageScore judges them differently. VantageScore applies a larger penalty for late mortgage payments than for other types of credit payments.

Because FICO has indicated that it factors late payments more heavily than VantageScore, late payments on any of your accounts might cause you to have lower FICO scores than your VantageScores.

Impact of Credit Inquiries

VantageScore and FICO both penalize consumers who have multiple hard inquiries in a short period of time. They both also conduct a process called deduplication.

Deduplication is the practice of allowing multiple pulls on your credit for the same loan type in a given time frame without penalizing your credit. Deduplication is important for situations such as seeking auto loans, where you may submit applications to multiple lenders as you seek the best deal. FICO and VantageScore don’t count each of these inquiries separately—they deduplicate them or consider them as one inquiry.

FICO uses a 45-day deduplication time period. That means credit inquiries of a certain type—such as auto loans or mortgages—that hit within that period are counted as one hard inquiry for the purpose of impact to your credit.

In contrast, VantageScore only has a 14-day range for deduplication. However, it deduplicates multiple hard inquiries for all types of credit, including credit cards. FICO only deduplicates inquiries related to mortgages, auto loans, and student loans.

Influence of Low-Balance Collections

VantageScore and FICO both penalize credit scores for accounts sent to collection agencies. However, FICO sometimes offers more leniency for collection accounts with low balances or limits.

FICO 8.0 also ignores all collections where the original balance was less than $100 and FICO 9.0 weighs medical collections less. It also doesn’t count collection accounts that have been paid off. VantageScore 4.0, on the other hand, ignores collection accounts that are paid off, regardless of the original balance.

What Are FAKO Scores?

FAKO is a derogatory term for scores that aren’t FICO Scores or VantageScores. Companies that provide FAKO scores don’t call them this. Instead, they refer to their scores as “educational scores” or just “credit scores.” FAKO scores can vary significantly from FICO scores and VantageScores.

These scores aren’t completely valueless, though. They can help you understand where your credit score stands or whether it’s going up or down. You probably don’t want to shell out money for such scores, though, and you do want to ensure the credit score provider is drawing on accurate information from the credit bureaus.

The post Experian Credit Score vs. FICO Score appeared first on Credit.com.

Source: credit.com

10 Ways to Build Credit Without a Credit Card

A woman in a bright red shirt smiles and looks at her cellphone while making notes in her notebook about building credit without a credit card

Credit cards are a great tool for building credit. They’re easy to use, offer flexibility, and sometimes even reward you for using them. Most also directly impact your credit score and are used by many people to begin building their credit profile.

But what if you don’t want a credit card or are having trouble qualifying one? Don’t worry. There are other plenty of other ways to build a strong credit history. Here are ten options for building credit without a credit card.

1. ExtraCredit

The easiest way to start building your credit without getting a credit card is to sign up for ExtraCredit and add your rent and utility payments to your credit profile. With ExtraCredit, you can use the service to add bills not typically reported to the bureaus and get credit for bills you’re already paying. We help strengthen your credit profile by adding your rent and utility payments as tradelines to your credit reports with all three credit bureaus. Continue paying those bills on time, and rent reporting can help you add more to your credit history and help you work your way up to a good credit profile.

Build Credit with ExtraCredit

2. Authorized User Status

Authorized user status is a great way to begin building credit—as long as you and the primary cardholder are on the same page. As an authorized user, you can use the primary cardholder’s credit card and piggyback off their credit card activity. Even if you never use the card, card activity can still be used to positively impact your credit. You’ll want to verify with the credit card company that they report card activity for authorized users. Otherwise, you’ll be wasting your time.

This method comes with some risks, though. Your credit report will reflect how the card is used, even if you’re not the one using it. If you or the primary cardholder racks up an excessive balance or misses payments, that activity could end up damaging your credit instead of helping it. Only become an authorized user if you are both committed to practicing smart credit-building habits.

3. Credit Builder Loans

Credit builder loans aren’t widely publicized, but they are a great way to build credit without a credit card. Smaller institutions like credit unions are generally more likely to offer credit builder loans specifically to help borrowers build credit.

Typically, you borrow a small amount, which is put into a CD or savings account and held until the loan is paid off. You make payments for a set amount of time until the loan is paid. At that time, you can access the funds, including any interest earned from the savings account. And if you’ve made all your payments on time, you’ve been successfully building your credit all along.

These loans often have low interest rates and are accessible to those with poor or nonexistent credit. That’s because you provide all of the collateral for the loan in cash, so it’s not a risk for the lender. Credit builder loans aren’t great if you need the money now—since you need to pay off the loan before you can actually access the funds—but if you have time to build up your credit, they’re a great place to start.

4. Passbook or CD Loans

Similar to credit-builder loans, passbook or CD loans are offered by some banks to existing customers using the balance you already have in a CD or savings account. You build credit as you pay down the loan, and you can access your balance once the loan is paid off. These are very similar to credit building loans, but they use funds you already had in savings as collateral. Interest rates are typically much lower than credit cards or unsecured personal loans as well. Make sure your bank will report payments to the three major credit bureaus before opening this type of loan.

5. Peer-to-Peer Loans

Peer-to-peer loans are made by an individual investor or groups of investors instead of traditional financial institutions, with the accrued interest going back to the investors. While they may sound sketchy, P2P loans are completely legitimate and can be set up through a reputable P2P service like LendingClub—unlike borrowing money from your cousin.

P2P loans will typically accept borrowers with lower credit scores than traditional lenders, but their credit requirements and interest rates will vary depending on the lender—and their rates and fees may be higher than other personal loans. Before you take out this type of loan, ask whether the service reports your timely payments to the credit bureaus so you can get a positive impact on your score.

6. Federal Student Loans

If you’re a student looking to build credit, you may consider a federal student loan. Most federal student loans don’t require any credit history. Private options, on the other hand, often require good credit scores or a cosigner. Don’t take on student debt just to build your credit, but if you’re already considering a student loan, they could be a good way to get started. Federal student loans show up on your credit report, and if they’re paid on time, they can help you build a positive payment history.

7. Personal Loans

Some lenders offer unsecured personal loans to individuals with no or bad credit. These involve borrowing a fixed amount of money and making fixed payments every month. If you don’t have an established credit history, you will likely be charged a higher interest rate. You may be able to get a co-signer to help your odds of approval for lower rates.

Don’t bother with payday loans. These will not help you establish credit history and will just end up costing you money in the long run. Alternatives like OppLoans do report payment history to the credit bureaus, but their rates are typically higher than traditional personal loans.

Apply for a Personal Loan

8. Auto Loans

Most traditional auto loan dealers report all your payments to the credit bureaus. And since auto loans are secured by the vehicle, they’re less risk for the lender than unsecured loans. That means you might be able to qualify for them even if your credit isn’t stellar—though that might come with the expense of higher interest. If you make your loan payments on time, you might be able to positively impact your score and refinance later, though.

9. Mortgages

Getting a mortgage with no credit history is difficult but not impossible. If your goal is just to start building credit, a mortgage may not be the best place to start. But if you’re ready for home ownership and the possibility of building your credit with a mortgage, you have options. First-time homebuyers may consider FHA mortgage, for example, which is available to individuals with a thin credit file. Smaller lenders like credit unions tend to be more flexible and may help you qualify for a mortgage as well.

Your credit score might take a hit when you first assume a huge debt, but it will rise over time with regular monthly payments. Concentrate on making those payments on time to continue building your credit.

10. Rent

Most credit reports do not contain entries regarding your rent payments simply because landlords don’t bother reporting that activity. But credit bureaus will incorporate timely rent payments into your credit report if that information is submitted to them. If you’re evaluating a rental or you currently rent, ask the landlord if they will report your rent payments. You might also be able to use online rent payment applications to ensure this information is reported.

Want to get credit for your on-time rent payments? Sign up for ExtraCredit. Our unique Build It feature will submit rent and utility payments to the three credit bureaus on your behalf, so you can get credit for paying those bills on time. In fact, we’ll look for your past payments to make sure they are submitted so you get credit for previous rent and utility payments as well.

Keys to Building Credit

Whatever option you choose to build credit without a credit card, you must make payments on time consistently. Late payments deal severe damage to your credit score. Avoid financial obligations that put you at risk of making late payments or defaulting.

You also need to keep in mind your account mix. If you only have installment loans and no revolving credit such as credit cards, you won’t have an ideal account mix. Account mix makes up about 10% of your credit score.

Your credit utilization ratio—or the amount of credit you have tied up in debt—might also suffer if you have no credit card or other form of revolving credit. However, in most cases, no credit utilization is better than high credit utilization.

Ready for a Credit Card?

If you’re ready to try building your credit with a credit card, try a secured credit card. These cards are often available to people with bad or no credit, and they typically start with smaller credit limits that can help you learn responsible money management habits.

OpenSky® Secured Visa® Credit Card

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on Capital Bank’s secure website

Card Details
Intro Apr:
N/A


Ongoing Apr:
17.39% (variable)


Balance Transfer:
N/A


Annual Fee:
$35


Credit Needed:
Fair-Poor-Bad-No Credit

Snapshot of Card Features
  • No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
  • The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.
  • 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
  • We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search “OpenSky Card” in Facebook.)
  • OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.
  • *View our Cardholder Agreement located at the bottom of the application page for details of the card

Card Details +


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Source: credit.com

Why You Need ExtraCredit in Your Life

What do you need your credit score for? In a nutshell, a lot. Credit cards, loans, mortgages, APR, even renting an apartment—whether or not you qualify is based largely on your credit score. If your credit is less-than-ideal, you know it can make your life just that much harder.   

Having a bad credit score can hold you back. It can keep you from feeling in control of your life. You might feel like you’re in a vicious cycle: you apply for credit to improve your score, get denied, suffer a hard inquiry, watch your credit score drop and try again. And it starts over.

We get it. And we want to help. Enter ExtraCredit, the newest product from Credit.com. ExtraCredit is a comprehensive credit solution, with specific and encompassing features that helps you with every dimension of your credit. 

But ExtraCredit isn’t your typical credit solution. Think of it as a lifestyle change. Think of it as a way for you to take your life back. 

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What’s ExtraCredit?

ExtraCredit is your one-stop-shop for all things credit. Need identity protection? ExtraCredit’s got it covered. Want a look at your FICO® Score? Sure! An exclusive discount with one of the leaders in credit repair? Yep, we’ve got that too. Ready to add more to your credit? We’ve got your back. ExtraCredit is here for you, no matter what your credit score is. ExtraCredit helps you own your life—starting with your credit. 

ExtraCredit has five features, each created to help you get where you want to be. Here’s the lowdown on each: 

Reward It

So you decided to sign up for ExtraCredit. Smart choice! Because you’ve made such a smart choice, we’ll send you an ExtraCredit card loaded with $5. That’s real money. And that’s what Reward It is all about.

It doesn’t end there. When you sign up with ExtraCredit, we start sending relevant financial offers your way. Let’s say you get approved for one of those financial offers. That’s a big deal! And we want to celebrate with you. Which is why we’ll load your ExtraCredit card with up to $200. That’s right—up to two hundred dollars. All for you, because of your smart financial decisions. 

Learn More about Reward It

Track It

There are a lot of credit scores out there. And there are a lot of apps and services that claim to have the score. You know, the one and only completely accurate score you need. But the thing is, that doesn’t exist. So the score you might be seeing on one of those other apps isn’t the same as the FICO® Score that lenders see. In fact, you have at least 28 credit scores. That’s a lot to keep track of.

That’s where Track It comes in. ExtraCredit will keep track of your 28 FICO credit scores, so you can keep track of every single one. But it goes one step further by showing you what each score is used for. Plus, you’ll get access to your credit reports from all three major credit bureaus—Experian, TransUnion and Equifax.

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Guard It

Here are some statistics for you: in 2019, 14.4 million consumers were victims of identity fraud. Sure, that might not sound like a lot of people. But when you realize that it comes out to about 1 in 15 people, it feels like a much bigger threat. In total, 33% of adult Americans have been victims of identity theft. 

You might think that you’ve got all the protection you need. And maybe you have set up a few precautions here and there. But criminals nowadays are smart. Just look at those stats! They know what they’re doing. But don’t sweat it—so do we. Guard It’s here to save the day.

Guard It provides services to keep you nice and safe. There’s Dark Web Monitoring, which will continually scan hidden websites and file-sharing networks for data breaches. Then there’s Compromised Account Monitoring that’ll catch unauthorized bank changes and accounts opened with a stolen identity. And last, but not least, there’s Identity Theft Insurance. That’ll help protect you from financial danger with a $1,000,000 policy. Better safe than sorry. 

Learn More about Guard It

Build It

We all know that credit card payments play a major role in your credit score. But that’s just half the story. What about all the other bills that you pay, like rent and utilities? Shouldn’t those count? We definitely think so, which is where Build It comes in.

Build It uses Rent & Utility reporting to match transactions from your bank account. Think about that for a second—Build It will help you add more to your credit profile whenever you pay your rent on-time. How easy is that? 

From there, Build It continues to report your payments to all three major credit bureaus each month. 

Learn More about Build It

Restore It

So your credit’s not where you want it to be. And you need help. The good news is, you’re in the right place. Restore It will connect you with one of the leaders in credit repair. You’ll get an exclusive discount for CreditRepair.com, a credit repair service that has a killer track record. If they are not available in your area, you will get that discount with another leader in credit repair.

Learn More about Restore It

The Breakdown

Okay, we know that there are a lot of credit solutions out there. You’ve probably seen other services, like credit repair, ID protection and credit monitoring. But here’s the thing—no one offers a comprehensive service like ExtraCredit. 

With ExtraCredit, you get five killer features all wrapped up in a box with a bow on top. Here’s a breakdown of how much the ExtraCredit services would typically cost on their own:

  • Basic Credit Repair: $24.95+ 
  • Rent Reporting: $9.99 
  • ID Protection: $34.99
  • FICO Scores: $19.99

Altogether, that’d add up to a cool $89.92. But with ExtraCredit you get all five services at $24.99 a month, plus real cash back for select offers. 

The Bottom Line

Sure, there are a lot of credit solutions out there. But here’s the thing—ExtraCredit impacts every dimension of your credit. So you could go with one-dimensional services provided by the other guys. Or you could go with ExtraCredit, which offers so much more than the basics.

ExtraCredit is here for you. It’s like a team of credit pros, all focused on monitoring your credit and satisfying your credit score needs. All you have to do is sit back, relax and let ExtraCredit do the work. 

ExtraCredit is the last credit solution you’ll ever need. Join the revolution today.

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Source: credit.com