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What scoring model is the Credit Score Simulator based on?
What scoring model is the Credit Score Simulator based on?
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The Credit Score Simulator generally employs either the FICO or the VantageScore models as the credit scoring model. However, the models depend on the service or platform that provides the simulator. That is how it normally goes.
FICO Score Model:
It is worth mentioning that the FICO Score model is the most widely used score, and it continues to influence all credit decisions. Its vendors include mortgages, autos, and credit cards.
Looking at the Credit Score Simulator that is forwards looking based on the FICO model, the only thing to expect is its corrosion model, a FICO score emulating changes being it forward-looking on how the following changes things:
- Credit history: the longest time without delinquency payment (35% impact on credit).
- Total amount owed: total balances (30%).
- Credit: how long have you had credit (15%)?
- New credit: recently opened ratio of accounts (10%).
- Credit mix: types of credit one holds (10%).
VantageScore Model:
- The other set of scoring models trying to address the drawbacks found outside the FICO scoring model is VantageScore.
- Vantage Score is also similar to the FICO.
- However, it focuses on something.
- How payment history will affect people’s credit scores where.
- Payment history has a more significant impact.
- Credit depth has an impact, but it is moderate.
- Utilization impact is considerably high.
- Balance, Age, and recent credit history have a low Impact.
What Model Does Your Simulator Use, and Is it Based on FICO?
FICO-Based Simulators: These are often found in any commercial bank, credit card issuer, or lending institution.
Lenders who rely mainly on the FICO score in making their lending decisions will naturally offer services guided by a FICO-based simulator.
Simulators Based on VantageScore: VantageScore-based simulators use several free credit monitoring services, such as Credit Karma. They are also used in credit monitoring apps and other non-lending platforms.
How to Determine Which Model the Simulator Is: Check with the Provider:
In most cases, simply asking the simulator will let you know if their basis is Fico or Vanticore. This kind of information is most often available in terms of help and even the FAQs of credit monitoring tools or financial institutions.
Review Credit Score Provided: This applies especially when the score simulation gives the current activity score. In that case, the activity score may be presumed to be from the same simulation model. You will need to appreciate this fact to appreciate why the simulator is not just a black box into which you feed changing parameters and receive different score estimates without understanding which scoring model your simulator is based on because FICO and VantageScore are likely to compute scores in a little different way.