The Two Different Credit Score Models & How Each Are Calculated.

Image outlining credit scoring process and the analysis of credit scores in order to obtaining personal funding.

Most consumers are not aware of the way that credit works, nor do they understand that there are actually two different credit score models that show prospective creditors how well you maintain your credit.  These two different methods are referred to as your Vantage Score and your FICO Score.

It’s often very difficult to learn the facts about how your credit works when the internet is full of resource centers, blogs, and outdated information that is often additionally incorrect or full of nothing short of just sales ads, and false advertising created in order to sell another credit card, purchase another product or service or get you to invest or considering investing in one more thing that in many cases won’t lead you any closer to your goals than you already are.

To bring some applicable, and up to date information to you, we’ve compiled five of the most important credit facts that you need to know as we approach 2021 to help you learn about credit and the things that determine your credit scores the most.

Your Credit Scores Are Based On 5 Primary Facts Then Added Together To Create What Is Called Your Fico Score.

5 Separate Elements make up your FICO credit score and each of those factors equal a percentage of how your credit score is calculated. Below are the 5 separate elements that your credit score is based off of.

Your Payment History Makes Up 35% Of Your Credit Score

From the moment that you open up a brand new credit card, open a new loan or line of credit, obtain a new auto loan and even a new home loan, the clock starts ticking. Have you ever been even a day late on any of your payments, have you ever missed a payment, have you had a recent charge-off, or have any of your creditors labeled your account with them as delinquent, or have any of your creditors not correctly reported your on time payments? These things can all negatively impact your credit score, and unfortunately (or fortunately) your payment history over the last 7-10 years makes up 35% of your total credit score. For all negative items that are not bankruptcies, the items are allowed to stay on your credit report for 7 years unless this was as a result of an error being made in reporting. For Bankruptcies, Bankruptcies are most frequently allowed to stay on your credit report for 10 years unless an error was made in the filing or reporting of the bankruptcy.

Your Credit Utilization Makes Up 30% Of Your Credit Score

One of the secrets to great credit is found in your credit utilization score. Your credit utilization score is calculated by comparing the total amount of credit that you are using by the total amount available to you in your line of credit or, on your credit card. By only using 30% or less of your total available credit you are ensuring that your credit utilization score is always right where it should be to help you keep improving your credit scores over time. 

The Length Of Your Credit History Makes Up 15% Of Your Credit Score

While adding up to a smaller percentage than the above elements listed, the length of time you’ve had established credit otherwise known as your credit history makes up a total of 15% of your credit score. While our experience tells us that a longer credit history provides the 3 credit bureaus with a larger picture of past credit usage it additionally empowers the credit bureaus as well as potential new creditors to determine how responsible you will be with any new credit provided to you in the future.

New Credit and New Credit Inquiries Make Up 10% Of Your Credit Score

New credit and new credit inquiries make up 10% of your credit score. With each application for new credit that is made, a hard inquiry is made to your credit report, and while in many cases the amount of hard inquiries that are made over a 30 day period only count as 1 hard inquiry except in the case of credit card applications, it’s important to ensure that any inquiries that you did not authorize get removed so that they do not count against you.

Credit Diversity Makes Up 10% Of Your Credit Score

Having a broad range of credit lines and available credit helps to ensure that your reliability is in-fact secure to potential lenders. Lenders want to know that you have the ability to pay multiple different forms of credit off, and have the financial resources to ensure on time payments as well as showing that you have responsible spending and credit usage habits. Because credit diversity makes up 10% of your credit score, we recommend having at least 3 credit cards, and a history with a loan or line of credit on your credit report in order for those accounts to make the most impact in raising your credit score, and reflecting the best possible history.

Available Credit Makes Up 3% Of Your VantageScore But Isn’t Taken Into Consideration In Determining Your FICO Score:

While your FICO credit scores reflect your available credit, your credit score isn’t necessarily determined by your available credit however, with VantageScore it is important to note that when planning to purchase a home your available credit does in-fact come into play and makes up 3% of your Vantage Credit Score.  

Credit Fact: You Don’t Just Have 1 Fico Score. All 3 Credit Bureaus Calculate A Credit Score For You Then Average Them Together To Create Your FICO Score For You.  

Credit Tip: Know what your scores are on each of the 3 Bureaus Reports, and know which of the 3 bureaus lenders, dealerships and brokers pull from before applying so that you can work to increase your scores where they need help the most. Please see our post on VantageScores vs. FICO scores to know which score will most likely apply to your goals.


We hope this article has brought some clarity into the 5 aspects that make up your credit score, and how they apply to you as you begin repairing, building or rebuilding your credit. For help in repairing, building or rebuilding your credit please feel free to sign up for a free credit analysis and a member of our team will be happy to assist you in the process of creating a plan of action that will outline the steps that you need to take in order to get pre-qualified and then approved for the financing you are aiming to obtain.

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