What Does The New Credit Score Mean To You?

Your credit score may change even without you making any new charges. Lenders now have a second formula for judging your financial past, and this system can result in a whole new credit score.

The three major credit bureaus have created their own credit scoring system with its own scale. Now your old score may look a lot different than your new one.

Joshua and Jamey Tice just graduated from college, bought a house and are having their first child.

Joshua Tice says he?s feeling the financial pressure ?both of us don't have much credit, but we got to build it some how"

As this couple's personal lives transform, their credit scores may change too.

The credit bureaus Equifax, Experian, and TransUnion just switched to "VantageScore", a new system for rating credit. Now these agencies will likely give you a higher but not necessarily a better credit score. The FICO score is still the most commonly used credit scoring method.

Credit counselor Henry Cameron says the vantage and FICO scores are calculated using the same criteria and can be managed using similar techniques. "The big difference is they came up with a grading score for the advantage 800-900 is an A and it goes all the way down to a A-B-D- and F."

Most important is payment history, followed by amount outstanding debt, how many lines of credit a person has open and how many times you apply for credit.

Financial specialist say when shopping and reaching for the plastic you may want to consider reaching for your credit card rather than your debit card. But if you do use your credit card they advise you only use 35 percent of your credit line.

The classic fico scale runs from 300 to 850. While the vantage score starts at 501 and goes to 990, and there's a grading system. An average score for FICO is about 650, but for the new advantage, its 700-800. So from now on when checking your credit score, you also need to consider the source.

The VantageScore was made to compete with the FICO score, because every time the credit bureaus used it they had to pay a company called "fair Isaac". Now, is a better system? The jury is still out.

Click on the links below for more information on the VantageScore or to find out how to get your annual free credit report.