Credit Scores Explained: FICO, VantageScore, and How They Work

A complete guide to understanding credit scores: what factors affect your FICO and VantageScore, what score ranges mean to lenders, and how credit repair improves your score through the FCRA dispute process.

FICO Score Ranges: What Each Tier Means

FICO scores range from 300 to 850. The score ranges most commonly used by lenders to categorize applicants are as follows. Scores of 800 to 850 are classified as Exceptional - consumers in this range receive the best available rates and terms from virtually all lenders. Scores of 740 to 799 are classified as Very Good - access to competitive rates on mortgages, auto loans, and credit cards. Scores of 670 to 739 are classified as Good - acceptable to most lenders, though not at the best available rates. Scores of 580 to 669 are classified as Fair - some lenders will approve applications but at noticeably higher rates. Scores below 580 are classified as Poor - most conventional lenders will decline applications; subprime and secured products may be available. The practical difference between a 620 score and a 720 score on a 30-year mortgage can be 1 to 2 percent in interest rate, translating to $60,000 to $140,000 in additional interest over the loan term on a $300,000 mortgage.

FICO Scoring Factors: The Five Weights

FICO scores are calculated using five weighted factors. Payment history at 35 percent is the most important - it records whether you have paid each account on time every month. A single 30-day late payment on a mortgage or car loan can drop a score 60 to 110 points depending on your overall profile. Amounts owed at 30 percent - primarily credit utilization - measures how much of your available revolving credit is being used. Keeping utilization below 30 percent is the standard recommendation; the best scores typically show below 10 percent. Length of credit history at 15 percent rewards consumers who have maintained accounts in good standing for many years - the age of your oldest account, newest account, and average account age all factor in. Credit mix at 10 percent recognizes that consumers who responsibly manage both revolving credit (credit cards) and installment credit (loans) are better credit risks than those who only have one type. New credit at 10 percent includes hard inquiries from credit applications and the presence of recently opened accounts - too many recent applications signal financial stress.

VantageScore vs. FICO: Key Differences

VantageScore was developed by the three major credit bureaus (Equifax, Experian, TransUnion) as an alternative to FICO. It uses the same 300-850 scale and evaluates similar factors, but weights them differently and treats some data points distinctly. VantageScore 3.0 and 4.0 give less weight to medical debt than FICO, are more forgiving of occasional late payments in an otherwise strong file, and can score consumers with as little as one month of credit history (FICO requires at least six months). VantageScore is widely used by consumer credit monitoring services (Credit Karma, Experian's consumer service, Capital One CreditWise) but is less commonly used in mortgage underwriting, where FICO 2, 4, and 5 dominate. The score you see on a monitoring app is often a VantageScore; the score your mortgage lender pulls may differ by 20 to 50 points in either direction.

How Credit Repair Improves Your Score

Credit repair improves scores by removing inaccurate, incomplete, or unverifiable negative information from credit reports. Under FCRA § 1681i, credit bureaus must investigate disputes within 30 days and delete any item that cannot be verified. Each deleted negative item removes its negative impact on the relevant scoring factors. A deleted collection account reduces the count of adverse accounts in the payment history factor. A deleted charge-off removes a major derogatory mark. Removal of any derogatory item with a high balance reduces amounts owed. Credlocity Business Group LLC, led by CEO Joeziel Vazquez (FCRA Certified, BCCC, CCSC, CCRS), has conducted FCRA-based credit repair for 79,000+ clients over 17 years. For the complete framework of federal laws that govern this process, see our federal credit repair laws guide. To start your free 30-day trial, complete the intake form now with no upfront fees.