VantageScore vs. FICO: What’s the difference?

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In a Nutshell

VantageScore Solutions and FICO create credit-scoring models that use consumer credit data to generate credit scores — a three-digit number that predicts a consumer’s ability to repay a debt. But they use different methods to calculate scores, which may result in slight scoring differences.
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Here’s what you should know about the VantageScore® and FICO® credit-scoring models

The Fair Isaac Corporation introduced the first FICO® scoring model to lenders in 1989. According to the company, FICO® scores are used today by 90% of top lenders to make lending decisions. The VantageScore model wasn’t introduced until 2006. It was developed by the three major consumer credit bureaus — Equifax, Experian and TransUnion — to create a “more predictive scoring model that is easy to understand and apply.”

Although both models are designed to predict a consumer’s ability to repay a debt, they do not treat all credit data equally. Let’s explore some of the differences between the two models and why they may matter to you.

VantageScore and FICO criteria

 VantageScore® and FICO® credit-scoring models use data obtained from consumer credit reports to generate credit scores. But the data may affect scores differently depending on which model is being used. Let’s look at the key factors that these models use to calculate your scores.

VantageScore groups credit information into six main categories, but the categories don’t have the same influence on your scores.

  • Payment history: extremely influential
  • Age and type of credit: highly influential
  • Percentage of credit limit used: highly influential
  • Total balances and debt: moderately influential
  • Recent credit behavior and inquiries: less influential
  • Available credit: less influential

FICO groups the information into five categories, with each one representing a percentage of your score.

  • Payment history: 35%
  • Amounts owed: 30%
  • Length of credit history: 15%
  • New credit: 10%
  • Credit mix: 10%

But again, keep in mind that the exact impact a specific category will have on your credit scores can vary depending on your individual credit history and the specific credit-scoring model used.

Four ways VantageScore® and FICO® credit scores are different

Now that you know the general criteria used to generate credit scores, let’s look at how VantageScore and FICO use the data and the effect certain elements can have on your scores.

Length of credit history required

To have FICO® scores, consumers need to have one or more accounts that have been open for at least six months and at least one account that has reported to the credit bureaus within the past six months (plus no indication on your credit reports of being deceased). Otherwise, FICO won’t generate your scores.

On the other hand, the VantageScore® model may be able to score consumers who are new to credit or use credit infrequently. VantageScore can use data of just one month’s history and one account reported within the previous 24 months.

So if you’re new to credit or you haven’t used credit in a while, you may not have FICO® credit scores, but you might have VantageScore® credit scores.

Tax liens and civil judgments

In July 2017, changes to public-record reporting requirements were implemented that affected the information sent to consumer credit bureaus, leading them to eliminate many tax liens and civil judgments from consumers’ credit reports. In response to the changes, tax liens aren’t weighed as heavily (but can still have a significant impact) in the latest VantageScore version, VantageScore® 4.0. And they can still have a significant impact on FICO® scoring models.

Credit inquiries

It’s a Catch-22. Applying for new lines of credit — such as student loans, credit cards or mortgages — can negatively affect your credit scores. But applying for multiple lines in order to compare rates makes sense if you want to get the best deal. To minimize the impact that shopping for credit can have on your scores, newer FICO® versions count multiple credit inquiries of the same type within a 45-day period as a single inquiry. This can be especially helpful when you’re shopping around for a major loan, like for a car, as multiple auto loan inquiries within that window should only count as one hard inquiry. For some older FICO® versions, the single-inquiry period can be 14 days.

VantageScore counts multiple inquiries, even for different types of loans, within a 14-day period as a single inquiry. Multiple inquiries on your reports for the same type of loan or credit, spanning more than a 14-day period, may have a greater impact to your VantageScore® credit scores than to your FICO® scores.

Take note though that according to the Consumer Financial Protection Bureau, mortgage loan inquiries within a 45-day window are recorded as a single hard inquiry.

What’s a credit inquiry?

An inquiry is a request for your credit file. There are two types: hard and soft. Hard inquiries occur when lenders look at your file after you apply for credit. In general, these will affect your credit scores. Soft inquiries are reviews of your file that don’t affect your credit scores. Examples of soft inquiries include requesting your own credit reports or lenders looking at them to qualify you for a prescreening offer.

Trending data

Credit scores represent a snapshot of an individual’s credit profile at the specific point in time when the scores are generated. The FICO® credit-scoring models, for example, use data about consumers’ borrowing and credit utilization that’s been reported to the credit bureaus at the time the scores are generated.

VantageScore® 4.0, on the other hand, incorporates data that reflects patterns of behavior over time. The latest scores may include up to two years’ worth of consumer spending and credit utilization data in its calculation.

If you’re starting to tie yourself in a knot over all this information, take a deep breath.

According to Ash Exantus, director of financial education at BankMobile, you should be on the right track as long as you’re managing your credit according to the general categories that VantageScore and FICO prioritize.

“It’s more important to focus on the similarities,” says Exantus, “than the differences.”

VantageScore and FICO ranges

Both credit-scoring models have evolved over the years, resulting in multiple versions of each. FICO generates two types of scores — base and industry-specific scores.

FICO® base scores help predict a consumer’s ability to repay a debt based on their overall credit profile, and they range from 300 to 850. Industry-specific scores help predict a consumer’s ability to repay a specific type of debt, such as an auto loan or mortgage, and they range from 250 to 900.

Unlike FICO, the VantageScore® model doesn’t generate industry-specific scores. It only calculates base scores. When it was first introduced in 2006, the scoring model had a range of 501 to 990. That changed when VantageScore® 3.0 was released, with a range of 300 to 850. And it continues today with VantageScore® 4.0, making it easier for consumers to compare their VantageScore® and FICO® credit scores.

How can I get my VantageScore® and FICO® credit scores?

You can get your credit scores from a variety of sources, including lenders, credit bureaus, nonprofit credit counselors and personal finance websites like Credit Karma. But watch out — some providers charge a fee for access to your scores, whereas others offer them for free.

It’s also a good idea to find out which scores you’re getting. Some sources provide actual VantageScore® or FICO® credit scores, while others use scores that are meant for educational purposes only and aren’t what lenders might use. Educational scores can be similar to your VantageScore® and FICO® credit scores, but not always.

Credit Karma provides VantageScore® 3.0 credit scores from TransUnion and Equifax, while some credit card issuers or banks may offer access to your FICO® scores from specific bureaus. So be sure to check which scoring model is being used and which credit reports your scores are based on.

Are my scores the same at all three bureaus?

Probably not. Lenders don’t always report to the three major consumer credit-reporting agencies: Equifax, Experian and TransUnion. And they provide information to different bureaus at different times. So it’s not unusual for your scores to vary slightly between agencies.

Next steps

Because credit scores are such a critical factor in a consumer’s ability to borrow money, it’s easy to get caught up in the numbers. But with so many scores available for lenders to use, it’s probably best to monitor how your scores change overall as you use credit, rather than focusing on specific numbers.

If you consistently pay your bills on time, reduce your debt and apply only for credit you need, over time you can establish a solid credit history.

About the author: Jennifer Brozic is a freelance financial services writer with a bachelor’s degree in journalism from the University of Maryland and a master’s degree in communication management from Towson University. She’s committed… Read more.