What is VantageScore 2.0?

What is VantageScore 2.0?

UPDATE: Credit Karma now offers VantageScore 3.0 credit scores from TransUnion and Equifax. Check your scores today!

In the 1970s, the Fair Isaac Corporation created the first credit scoring system, dubbed the FICO score. This has since been standardized as the industry's leading credit score model to assess potential borrowers. More recently, the VantageScore was created in collaboration with the three major credit bureaus (TransUnion, Equifax and Experian) as a new generic proprietary credit score model marketed as a more "consistent interpretation" and "accurate score" than FICO. As Credit Karma provides you with your VantageScore for free, here's what you need to know about it. Note that these details are based on the VantageScore 2.0 model.

Credit Scores Vary

First of all, it's important to keep in mind that you do not have one "true" credit score. There are actually over 100 different credit scoring models used in the industry that varies by bureau, reporting agency, model type and lender. Each model uses a different algorithm that weighs each part of your credit report differently, which explains why you may have a 750 from Credit Karma and a 762 from FICO. We've previously addressed how to understand the credit score differences; there are indeed many different credit score models, but they are all highly correlated. They use different ranges, different formulas, and the information found on your credit report can differ from bureau to bureau, but all the models aim to assess your credit history and translate it into your 3-digit credit score number.

The VantageScore

The three major credit bureaus offer their own proprietary models but usually provide the FICO score to lenders. The VantageScore was created as a consistent credit score model across the three bureaus to compete with the FICO score and offer lenders a more standardized score.

The VantageScore is being touted as "The New Standard in Credit Scoring," and it can potentially become big if the bureaus can compete successfully with the stranglehold FICO has on lenders. It just depends on whether lenders will be willing to change to a different model.

The VantageScore offers additional features that the FICO model doesn't incorporate, such as predictive scoring and a 24-month review of credit history. Here are some of the main differences between the two competitors:

  • Score range is from 501 to 990
  • VantageScore uses letter grades to spell out your credit health: 901-990 = A or Super Prime, 801-900 = B or Prime Plus, 701-800 = C or Prime, 601-700 = D or Non-Prime, and 501-600 = F or High Risk.
  • Takes into account 6 components of your credit report: payment history, utilization, balances, depth of credit, recent credit, and available credit.
  • VantageScore claims to score thin file consumers more accurately by providing predicative scores for consumers with limited histories
  • FICO range is from 300 to 850
  • No letter grades for FICO
  • Takes into account 5 components of credit report: payment history, amount of debt, credit history, types of accounts, and inquiries.
  • Thin file consumers often cannot generate a credit score at all, or are scored with inflated, high scores because they have few credit actions on file

Bottom Line

The VantageScore's particular credit scoring method is especially good news for consumers with thin files and consumers who may have prior negative actions against them but have a good recent history.

Again, please keep in mind that the VantageScore is one of dozens of models in use, and your VantageScore will still vary between the three credit bureaus. While they use the same scoring model, the information on your credit report may differ from bureau to bureau.

What is most important is that you monitor and manage your credit health by checking your credit score every few weeks. Keeping track of your credit score over time, not just once or twice, will give you the most valuable insights into how to adjust your credit habits to build towards a healthy score.

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.

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2 Contributions
110 People Helped

Helpful to 84 out of 95 people

I find it disturbing that responsible people like me are encouraged to alter their behavior in order to improve their credit scores. 

I have 0 debt; pay my credit card balance monthly without fail; pay every bill on time; car is paid-off; student loans are paid off.  Also, my credit card has a $20K limit, so I certainly do not need another.  I have budget and I stick to it.  Finally, I have built up a very big savings.

All of this leaves me rather annoyed to get a "B"  Vantagescore.  I will be ****ed if I will seek more credit accounts that I do not need just to pump-up this bogus credit score.

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2 Contributions
284 People Helped
Helpful to 4 out of 4 people

If you have a B score you qualify for most no annual fee credit cards, and most of those start with a 12 to 18 month 0% introductory APR period (no interest). One of the main reasons you are only a B is because you don't have enough open accounts based on what you said. I would recommend applying for several of these cards in order to build up the ammount of accounts you have. Go for the cash back cards like Chase Freedom and Capital One Quicksilver and you'll even get a free 100 bucks if you spend a certain amount in the first few months. I do this and just use the card for gas and/or groceries for the first several months and then pay the bill with the money that I would have used for the same thing out of my paycheck (again, these are 0% introductory period cards, so I'm not paying any extra interest doing this). I make sure I spend enough to grab the introductory cash offer and then dial it back. At that stage I usually keep the balance under a couple hundred bucks a month and then pay off in full or close to it with each monthly payment. Doing this ensures that I stay at 20% or below of my credit utilization ratio, which puts me in the excellent range. Finally, once the 0% APR period runs out and you do have to start paying interest, only buy one or two small things a month on that card and pay your bill in full each month. A lot of card companies will mark the card as incactive and stop reporting to the bureaus if you don't use them for a certain period of time, so it behooves you to at least make one or two small purchases each month once the 0% APR period runs out. If you do this you will bump that score up to an A well before you need to apply for that bank loan. The credit game is annoying, but it's not going away and it can work in your favor if you're smart about it.

3 Contributions
11 People Helped

Helpful to 10 out of 11 people

I saw my FICO score jump from 748 to a 765. meanwhile my vantage score has dropped 53 points in the last two months . I paid off a car loan two months ago and paid it off two years early. This month I charged a set of tires and had the front end aligned at the cost of $721.00  and paid off 200.00 before I even received a bill and I have six months to pay them off interest free from my firestone card. I don't have any Idea why the vantage score dropped as my FICO score has risen and all my other credit cards are paid off each month.It looks like somebody else is driving the vantage scoring now.

1 Contribution
9 People Helped

Helpful to 9 out of 9 people

If my actual credit score shows as Excellent (above 750) why is my Vantage Score only a "C"? That doesn't seem acurate.

1 Contribution
10 People Helped

Helpful to 10 out of 10 people

The only reason the big 3 created the Vantage score was because they didn't want to pay for the FICO license anymore. What they consider a "better" gauge of people's credit was a way for them to save money.

This whole thing has to stop. People should have one score and that's it. There are already 4 different scores - FICO, Vantage, homeowners insurance, and car insurance. Pretty soon, we will have 15 different scores, or something that ridiculous, on us. 

The industry doesn't give a crap about people - what else is new. People who are trying to rebuild their credit are immediately put out of the running for anything decent with the Vantage score. I have a good credit score but Vantage puts me down to a bad credit score.

People should be very angry about this. I am. 

Top Contributor
98 Contributions
573 People Helped

Helpful to 13 out of 14 people

One interesting thing about the Vantage score is that more banks are using it for their credit card decisions.  This means that it is becoming easier for those of us who monitor our scores and use the advice can max our scores faster and get what we have built up to.  I am certain that one of the reasons that I have 2 of my better cards is because they used the Vantage not the FICO. 

1 Contribution
117 People Helped

Helpful to 117 out of 125 people

Hello Learn Vest advisers:

My VantageScore score is C "good" and Credit Karma gives 628 "poor. Which one the lenders see? I have done my best to improve my credit score and only Vantage Score seems to notice. This is so confusing. Please elaborate.


New Learn Vest customer

1 Contribution
4 People Helped

Helpful to 4 out of 4 people

Despite the supposed predictive value of the Vantage score I find it unrealistic.  I have never had a late payment and pay in full each month.  Yet when I increase the amount of items charged my score immediately drops, now down to B, even though all accounts are paid in full each month.  This makes no sense and is certainly not predictive of ability to pay. When you increase credit card purchases Vantage apparently thinks you in dire financial condition and are doing this only because you can't pay your current bills.  Based on what?

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