What is the VantageScore?
What is the VantageScore?

In the 1970s, the Fair Issacs Company 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.

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 so that they could offer lenders a more standardized score and cut out the Fair Issacs Company.

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 lender. 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:

VantageScore FICO
  • 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

Additional features:

  • VantageScore is based primarily on the last 24 months of actions on a consumer's credit file
  • Keep in mind, 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
  • 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. 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.


All Comments
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Helpful to 1 out of 1 people

Can anyone tell me why my vantage score has dropped around 40 points in 3 months when all the information has stayed the same on my credit report? Utilization is the same, number of on time payments is up by 3, avg age of accts is up by 3 mos. Vantage climbed 60 points over 6 mos and then dropped 40 in 3 mos. My credit report card has been steadily climbing to and then hovering around 695. I also had the only hard inquiry dropped a couple mos ago. So if anything it should be going up!

Comment by
lukehyjacker

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This is BS. My Experian has gone from 688 to 744 last week. The Vantage Score today shows a 4 points drop. Really? I'd like to see their math and how they are calculating the score across three bureaus.

Comment by
foxberg

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I tend to agree with a LOT of the comments listed above having relocated to the US from Australia where I had 20k cc with a 0 balance and rating 1 with insurance wich means I had a no claim bonus for not having any claims for 5 years.  Here I have found it very difficult building credit I purchased a home cash a new car cash and financed with the help of my father in law a cheap car that I only did to build credit.  Having just paid it off again early... it appears my score has droped ... The way they seem to work out if your a good risk here seems to not be what you own or your networth but how much you still owe shame on the credit bureas here for not rewarding the good cliients who repay there debt 

Comment by
Julie2281

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Just be careful with your driving record here.  I've been driving for 18 years across 12 countries outside of the US before I came here without accident.  

2 years in and I have 2 accidents and 1 written off car against my name and so do many of my immigrant friends.  People just do stupid things over here and cellphones make it worse.

Reply by
alwyns

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I don't understand how you could have "excellent" credit with the big 3, no late payments for decades on anything and your "Vantage Score" is a C.  This makes absolutely no sense.  If they want to average the big 3, fine, but don't come up with some aribtrary new credit score we have to worry about being inaccurant.  The big 3 do that just fine.

Comment by
fishersauntd

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The system is always in favor of lenders, how they can charge more to you.  If you payoff your loans, your score drops.  If you ask for more your score drops.  If you cancel your credit card your score drops.  No matter what you do, the scores will drop.  I think te whole system stinks.  I am heavy user of credit cards but never carry balance from all my cards.  Still at the reporting time, I always get warning for over utilization of credit cards & my score drops.  One moenth I did not use my cards & guess waht score droped!!!! Go Figure!!!  Congress should fix these reporting problems.. Oh well that's another story... Any guess what is credit score for Feds:)

Comment by
PPCreditminder

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It is very frustrating and complicated figuring out all of this fluctuation in the scores from day to day.  One move and your score suffers a significant decline.  My one FICO score provided to us by our credit union monthly just dropped from 839 to 806 and my bills are paid off monthly.  For those not watching their scores will be terribly disappointed when their credit is turned down because of the way scores are kept.  My bills are paid off monthly and I think this whole idea of keeping scores in this manner is ridiculous!

Comment by
Willietheworm

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 My credit points get down  by 8 points because my credit card was 83% of utilization (Card with a limit of $1,000), now have 40% of utilization and points were not returned.  I really don't understand. 

Comment by
Vilmarycaraballo

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40% utilization is still too high.   Try to get it below 20% for every card, and then get it lower over time.

A high utilization for me is 3 %.  I buy stuff with my credit cards to keep them in use and then I pay them off fully as soon as they show a balance.  If you can, don't have a balance on your card for more than a few days.  People who pay it off after they get their statement will still show high utilization.

2 years ago I had a 0 credit score with 0 history.  I have 4 utility bills I always  pay as soon as I get the bill.  I have just now applied for my 7th credit line.  Almost all my credit cards give me something back, preferably cash.  The cards that don't I just use for something small every month just so that they don't get closed.  Last year I received 600-700 USD back just from my cards.

My experian score is now 759, just paying utilities and using credit wisely.  No auto loans, no mortgage, no debt.

Reply by
alwyns

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any luck since you last post?   im going through the same....just sitting and waiting for the scores to go up!

Reply by
dmartinlpn

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If my vantage score is 671, what would my FICO score be? I am curious why the score is set up to put people in disadvantage again. Something needs to be done to protect people from this rip off.

Comment by
dziecko

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The article mentions: " VantageScore is being touted as “The New Standard in Credit Scoring”,

I'd be interested to know WHO is "touting" this.

I have never requested credit from anyone who didn't prefer and request a FICO score. 

Top Contributor

Comment by
BungalowMo

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no one is looking at a VantageScore they are still hung up on the FICO(the new economy has shook no one to their senses yet regarding credit), esp car dealers. Mine 738, they say doenst tell them ANYTHING 

Comment by
zsaxt642

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