Capital One is one of the largest credit card companies in the United States of America with a large branch internationally. Whenever you apply for a credit card or a loan from Capital One, the credit reporting agency will inform them about your credit status and score to approve your application and set the appropriate interest rate. However, the question arises as to which credit scoring model this company employs for credit decision-making; FICO or Vantage Score?
Understanding Credit Scoring Models
Understanding the two main credit scoring models used in lending choices helps one appreciate the particular credit scoring policies of Capital One:
- Designed by Fair Isaac Corporation, FICO scores are the most often utilized credit score available to creditors. FICO is computed in more than one score, each designed for a distinct kind of credit borrowing. FICO scores range from 300 to an ideal high of 850; so, higher scores show improved credits and reduce risk on the part of the lending organization.
- Designed by the three credit bureaus—Experian, Equifax, and TransUnion—VantageScores are fresh credit ratings, unlike FICO scores. They likewise start at three hundred and go to 850. Although they are used less often because to FICO's popularity, vantage scores are likewise comparable to FICO scores.
It is therefore important to understand which model is relied on by Capital One more often; FICO or VantageScore.
This paper compares Capital One’s utilization of FICO and VantageScore as automobile financing risk indicators.
In other words, the extent of risk evaluation that Capital One adopts on credit cards and consumer loans is the FICO Score.
However, Capital One only retrieves the FICO Score 8 model by TransUnion each time a consumer applies for a credit product. FICO Score 8 is a credit score that falls from 300 to 850 and was developed to reflect how predictive a consumer is of future credit risk. It should be noted that any score beyond 700 is typically deemed good to excellent credit.
While VantageScores or other credit report data may be used as a secondary tool, FICO Score 8 is the basic score that Capital One uses to determine a customer’s creditworthiness.
Why Capital One Uses FICO instead of VantageScore?
Capital One uses FICO Score 8 because FICO scores are more relied upon and show a statistical probability that a consumer will repay their debts as compared to VantageScores.
In addition, FICO has been in the market since 1989 and is the first credit scoring model that has been proven and tested for more than 3 decades. The data provided by this report can help the Fair Isaac Corporation predict the probability of default, depending on the FICO score of a consumer. An analysis of America’s largest lenders reveals that over ninety percent of organizations rely on FICO in determining who gets credit.
Still, VantageScore can be considered the new kid on the block for now. When comparing VantageScore and FICO, it is crucial to understand that although the two are close in their correlation, FICO has better risk predictive analysis integrated into its models.
For these reasons, VantageScore is the only credit score that Capital One considers when it comes to the new credit application. Utilizing the reliable and well-established FICO Score 8 offers the best capability for Capital One to address risk issues.
What credit score is required to get approval from Capital One for credit card facilities?
Each Capital One credit card and loan comes with its minimum credit score requirement:
- Capital One Platinum Credit Card – Credit Required
- Capital One QuicksilverOne Cash Rewards Credit Card – It is easy to apply with having low credit score or credit check.
- Capital One Savor Cards - This is for individuals who have a good to excellent credit score of 660 or above.
- Capital One Venture Cards - are targeted at people with good to excellent credit (FICO score of 700 or higher).
As a rule of thumb:
- This way, only the cardholders with FICO scores of 700 or above will receive the best Capital One rewards credit cards.
- Usually, consumers with FICO scores below 650 may only be eligible for the most entry-level products such as basic or secured cards.
- Credit scores with 580 or below can be denied credit from Capital One
Be sure to review the FICO 8 score with TransUnion through its website or other related sites before applying. This will help you understand the kind of Capital One credit card you will be a candidate for.
Fortunately, this is not the case as Capital One offers credit cards for those with fair as well as good credit. They have a broad range of products that can fit the situation with different credit scores. Therefore, do not limit yourself to a single card but rather, compare and contrast as per the current rating.
How to Build Credit: Techniques for Boosting Your Credit Rating with Capital One
If you don't quite have the FICO score needed for a particular Capital One product, take steps to boost your credit before applying:
- Always ensure that you make all payments on time to establish a credible payment history.
- This means that if you have balances on your credit cards you should aim to pay down your balances to lower your credit utilization rate.
- It is advisable to restrict the use of new credit card applications whenever it is possible
- The corrections you make to your TransUnion credit report are as follows
If you practice proper credit management for a few months, you can improve your FICO score, thus getting better rewards and the lowest interest rates.
This company also has secured cards meant to assist people build their poor credit ratings, like Capital One credit cards. If they are to pay their bills on time, Capital One’s secured card offers a genuine opportunity for credit repair.
The Takeaway
Capital One mostly focuses on the FICO Score 8 generated by TransUnion of all the applicants for new credit. Thus, the only matter of secondary importance is the VantageScore from Experian, Equifax, or TransUnion. Since most industries rely on credit scoring and the model has proved to have excellent predicting ability, the FICO scoring model provides Capital One with a clear view of the credit risk of the applicant.
It is the reason customers should aim at having a FICO 8 score of 700 or higher to get the best rates of Capital One’s top tier of rewards credit cards. Keep an eye on this particular score by using TransUnion to predict your likelihood of approval before applying to the next Capital One product.
Call now for expert credit repair services: (888) 803-7889
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