Understanding Your VantageScore Credit Score

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A credit score is designed to help lenders gauge how likely you are repay the money you want to borrow.

A good score may mean you have easier access to more credit, possibly even at lower rates. But the real key to improving your score is to focus on managing your credit better. The consumer benefits of a good credit score go beyond the obvious. For example, underwriting processes that use credit scores allow consumers to obtain credit much more quickly than in the past.

Credit scores also help promote objective lending standards — diminishing discrimination and human error. And credit scores also help to promote responsible lending by matching the appropriate types of credit to consumers based on their risk profiles. Perhaps most importantly, credit scores give borrowers an incentive to adopt better financial habits in order to receive the best terms and conditions from lenders.


What influences your score?

How many credit accounts do you have? How much have you borrowed? How promptly have you made your required payments? These and other key factors influence your credit report and, ultimately, your VantageScore credit score.

  1. Payment History
  2. Age and type of Credit
  3. Percent of credit used (utilization rate)
  4. Total balances / debt
  5. Recent credit behavior and available credit


What is the range of the VantageScore?

A score generated using the VantageScore 3.0 model, will range from 300 to 850 — a numerical scale that is more commonly used by other credit scoring models.

Regardless of the model’s score range, higher scores indicate to lenders that you’re a less risky borrower, while lower scores indicate that you’re an increased risk.


How to improve your score?

There are several ways to improve your credit score. But it’s much more important to focus on improving what’s in your credit report rather than obsessing over your credit score. Here is some general advice:

Pay your bills on time. How promptly you pay your bills has the strongest influence on your VantageScore 3.0 credit score.

Apply for credit only when you need it. Do not open too many accounts too frequently. And avoid opening multiple accounts within a short time span.

Keep your outstanding balances low. Aim to keep balances below 30% of the credit limit on any account.

Reduce your total debt. It is not necessarily bad to owe some money. But it is not good to owe too much money. Consider paying down some of your outstanding loans.

Build up a credit history. Maintaining a timely payment history for a mix of accounts (e.g., credit cards, auto, mortgage) over a longer period can improve your score.


Action How Lender Views This Action Impact To Your Credit Score
Pay bills on time Wisely handling debt Improvement
Not use all available credit Sufficient access to credit, unlikely to need additional funds Improvement
Hold accounts for long periods Experienced credit user Improvement
Use different types of loan products Experience with different types of repayment requirements Improvement
Inquire about new loans Are you just expanding access or taking on too much? Slight drop
Open a new loan Are you just expanding access or taking on too much? Slight drop
Open other new accounts Will you be able to effectively manage more credit? Slight drop
Max out credit cards Potential signal of increasing risk Drop
Pay late for the first time Potential signal of increasing risk Drop
Pay multiple loans late All credit at risk Larger drop
Miss three or more payments on a loan All credit at risk Larger drop
Stop paying loan Default Major drop
Foreclosure Default Major drop
Bankruptcy Default Maximum drop over extended time period


Check for accuracy on your credit report. If there are any mistakes, you should contact the credit bureaus and file a dispute. Your FinLocker offers a convenient link to file a dispute with all three credit bureaus.

FinLocker users can to view their credit score, payment history, credit inquiries, active accounts, length of credit and more.  Your credit score is a VantageScore 3.0. If you have not signed up for your complimentary credit score and monitoring, log in to your FinLocker to get started.

Sources:  How to improve your score

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