In a Nutshell
FICO® scores and VantageScore® scores are common types of credit scores lenders use to evaluate your credit. FICO and VantageScore are competing companies that use unique scoring models to translate your credit reports into credit scores.VantageScore® and FICO® are two companies that produce popular credit-scoring models lenders use to evaluate your credit.
The Fair Isaac Corporation introduced the first FICO scoring model to lenders in 1989, and VantageScore launched in 2006 as a collaboration by the three major consumer credit bureaus: Equifax, Experian and TransUnion.
Both VantageScore and FICO translate the information in your credit reports into credit scores but use different formulas to calculate those scores. You have many credit scores, including multiple versions of your FICO scores and VantageScore credit scores that are based on different credit-scoring models.
These differences in calculations are one reason why your credit scores can vary from model to model. Knowing how these models compare can help you better interpret your different scores and manage your credit.
Keep in mind that the free credit scores you see on Credit Karma are VantageScore 3.0 scores from two of the major credit bureaus, Equifax and TransUnion.
- VantageScore vs FICO: Credit factors that affect your scores
- Differences between VantageScore and FICO scoring models
- Which credit score is the best?
- Next steps: Monitor your credit
- FAQs about VantageScore vs. FICO
VantageScore vs FICO: Credit factors that affect your scores
Both FICO and VantageScore models analyze similar categories of information from your credit reports to generate a credit score. However, each model assigns a different level of importance, or weight, to these factors. This is a primary reason why your scores from each model may be different.
Take a look at how common versions of FICO and VantageScore models weigh credit score factors.
| Credit Factor | VantageScore 3.0 | VantageScore 4.0 | FICO® Score 8 and FICO® Score 9 |
|---|---|---|---|
| Payment history | 40% (extremely influential) | 41% (extremely influential) | 35% |
| Credit utilization / amounts owed | 20% (highly influential) | 20% (highly influential) | 30% |
| Depth of credit / length of credit history | 21% (highly influential) | 20% (highly influential) | 15% |
| Recent credit / new credit | 5% (less influential) | 11% (moderately influential) | 10% |
| Credit mix | N/A | N/A | 10% |
| Balances | 11% (moderately influential) | 6% (less influential) | N/A |
| Available credit | 3% (less influential) | 2% (less influential) | N/A |
Here’s what these five common credit factors mean:
- Payment history: This is your track record of making on-time payments. Late or missed payments can significantly harm your credit scores, especially if you have a higher credit score and miss a payment.
- Credit utilization / amounts owed: This refers to how much of your available credit you are using and your total debt balances. Many experts recommend keeping your credit utilization ratio below 30%.
- Depth of credit / length of credit history: This considers the age of your accounts. A longer credit history can generally have a positive impact on your scores.
- Recent credit / new credit: This factor looks at recently opened accounts and recent applications for new credit, which can also result in hard inquiries. These typically have a small effect on your credit scores, though lenders may view having many hard credit inquiries in a short amount of time as a sign of risk.
- Credit mix: This refers to the different types of credit you have, such as credit cards, mortgages and auto loans. Lenders usually like to see that you can manage a variety of account types.
Differences between VantageScore and FICO scoring models
Beyond how they weigh main credit factors, the scoring models have other key differences in how they evaluate your credit information.
How long must an account be open to generate a credit score?
- FICO scores typically require at least one account that has been open for six months or more and has been reported to a credit bureau within the last six months.
- VantageScore models can generate a score for you with just one month of history on at least one account reported within the previous 24 months.
This allows VantageScore to provide a credit score to people who might not be scorable by other models, which can be particularly helpful if you are new to credit.
How are collections treated by credit scoring models?
Here’s a look at how some common scoring models treat collection accounts:
| Scoring model | How it factors in collection accounts |
|---|---|
| VantageScore 3.0 | Ignores all paid collections of any type. Medical collections (paid and unpaid) are excluded from score calculations. |
| VantageScore 4.0 | Ignores all paid collections of any type. Medical collections (paid and unpaid) are excluded from score calculations. |
| FICO® Score 8 | Ignores collections with an original amount less than $100. Does not give special treatment to medical collections. |
| FICO® Score 9 | Ignores paid collections and gives unpaid medical collections a smaller impact than unpaid non-medical collections. |
How do credit scoring model weighs payment history and credit utilization?
While both models consider payment history and utilization important, some versions approach the data differently.
- VantageScore 4.0 is the first credit scoring model to use trended data from all three major credit bureaus. This means it analyzes your credit behavior over a period of time (up to two years), rather than just looking at a single snapshot. By doing so, it can see if you are consistently paying down debt over time.
- FICO® Score 8, FICO® Score 9, and VantageScore 3.0 do not use trended data; they evaluate your credit reports at a single point in time.
How do credit scoring models treat hard inquiries?
Both VantageScore and FICO models consider recent applications for credit, which typically result in hard inquiries on your reports. A hard inquiry is recorded when a lender checks your credit after you’ve applied for new credit. This can temporarily lower your credit scores.
Which credit score is the best?
There is no single “best” credit score, as different lenders use different scores for different purposes. You have many different credit scores, including multiple versions from both FICO and VantageScore.
- Both models are widely used. Many of the nation’s top banks, lenders and credit card issuers use VantageScore models. FICO scores are also widely used by lenders. If you want to know which score a lender will check while assessing your credit, you can reach out and ask.
- Scores can be product-specific. Lenders may use different scores for different types of financial products. For instance, if you apply for a car loan, a potential lender is more likely to use an auto-specific credit score. FICO offers industry-specific scores for auto loans, credit cards and mortgages.
- Lenders may have their own models. In addition to using FICO or VantageScore models, some lenders may use their own proprietary credit scoring models to evaluate applications.
Next steps: Monitor your credit
Since you have many credit scores, the most effective approach to improving them is to focus on the underlying behaviors that positively influence all of them. Consistently making on-time payments and keeping your credit utilization low are two of the most important habits for building and maintaining good credit.
It’s also important to monitor your credit reports regularly. This can help you spot potential errors or signs of fraud. Credit Karma provides free access to your VantageScore 3.0 credit scores and credit reports from two of the major bureaus, Equifax and TransUnion. You are also entitled to a free credit report from each of the three major bureaus by visiting AnnualCreditReport.com.
Some banks and credit card issuers let you check certain versions of your FICO scores for free.
FAQs about VantageScore vs. FICO
Neither FICO or VantageScore is inherently “better” than the other. They are different tools created by competing companies to help lenders assess credit risk. The most relevant score for you is the one your potential lender uses when you apply for credit. Because you can’t always know which score a lender will use, it’s best to focus on the credit habits that will positively affect all your credit scores.
Yes, your VantageScore is one of your actual credit scores, but remember that you don’t have just one credit score. You have many credit scores from different models and versions created by companies like VantageScore and FICO. Each score is a real snapshot of your credit health based on the data in your credit reports and the specific formula used to calculate it.
Credit Karma provides your VantageScore 3.0 credit scores and credit report information from two of the three major credit bureaus, Equifax and TransUnion. Those credit scores are generated using the VantageScore 3.0 credit-scoring model, which is widely used by thousands of lenders, including nine of the top 10 banks. Keep in mind that you don’t have just one credit score. The financial industry uses many credit scoring models, including those from VantageScore and FICO as well as proprietary models.