How Your Credit Score is Calculated

March 30th, 2016

Credit scores, and credit reports are one of those topics in life that are very important but where there isn’t much transparency. This combination results in a great deal of speculation and misinformation. So, let’s learn more about credit scores.

One of the first things to know about credit reporting is that there are three major credit bureaus that gather and report your credit information, they are Experian, Equifax and TransUnion. These three credit bureaus are where your scores are calculated, and each of them uses a different score. These different scores that could be reported are a FICO score, VantageScore, FICO Next Gen Risk Score, Beacon Score or an Empirica score. Let's take a deeper look at these different scores and see how they are calculated.

FICO Score

This score is most commonly used and it is what Experian reports to lenders. Your FICO score is comprised of several positive and negative factors. These factors are weighted by importance, so some things hurt or help your FICO score more than others.


Your VantageScore is meant to do the same thing as your FICO score, which is to demonstrate your creditworthiness to lenders, however it is weighted differently and based on somewhat different factors.

The VantageScore is also given a letter grade, A through F

FICO NextGen RISK Score

Next Generation risk scores are designed to give lenders a more in-depth look into your FICO scores. Lenders don’t tend to use this score and it is not available for you to check. FICO NextGen scores range from 150 to 950. All three credit bureaus have named their NextGen scoring methodologies something different:

Beacon Score

Beacon is another score that is calculated in order to demonstrate your creditworthiness to lenders. This score is usually used by Equifax. Beacon Score is calculated much like your FICO score. Scores range from 0 to 850 and it is all calculated based on the following:

Empirica Score

The Empirica Score much like your FICO, and Beacon score, is based upon the information in your credit report. This credit score is provided to lenders, typically by TransUnion. The scoring range is roughly the same as the other credit scoring methodologies. Scores range from 150 to 934.