VantageScore vs. FICO score: The biggest differences between your VantageScore and FICO ratings

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• FICO and VantageScore are companies that create credit scores using info from your credit reports.
• While the FICO score is older and more popular, lenders may also reference your VantageScore when making credit decisions.

• The most important factor that determines both your VantageScore and your FICO score is your payment history. 

Your credit report lists your credit accounts and how well you managed these accounts. This information gets condensed into your credit score. The higher your credit score is, the better that reflects on your history as a borrower. A higher credit score will earn you lower interest rates when you borrow money, anything from a loan to a credit card.

Credit scores are calculated by credit scoring algorithms. The two most widely used credit scoring algorithms come from FICO and VantageScore. While the two credit scoring models use similar factors and follow similar scales, it's a good idea to understand the difference between VantageScore and FICO scores.

What is a FICO score?

The FICO credit score is the most popular and widely used credit scoring model. Created in 1989 by the Fair Issac Corporation (which rebranded to FICO in 2009), this credit score follows a 300-850 scale where a higher score is better. According to FICO's website, their score is used by 90% of top lenders.

Your FICO score is based on the content of your credit report. Three major credit bureaus — Experian, TransUnion, and Equifax — track your credit activity for your credit score. You could have a different FICO score based on which credit bureau is supplying your credit report.

The main factors in a FICO score are:

• Your payment history (35% of your score)
• Credit balances (30%)
• Length of credit history (15%)
• New credit (10%)
• Mix of credit accounts (10%)

FICO releases new versions of its credit scoring model every few years to account for changes in the consumer lending risk landscape. The data company also releases specialty versions of its credit scoring model tailored to specific industries, such as the FICO Auto score for the auto lending industry.

FICO has released eight main iterations of its credit score labeled 1-10 (there is no FICO 6 or 7). Lenders usually use FICO 8, launched in 2004, and FICO 9, launched in 2014. FICO released FICO 10 and 10T in 2020, though the model has yet to see wide usage.

What is VantageScore?

VantageScore is a newer credit-scoring model created by the three major credit bureaus as an alternative to FICO. Like FICO, VantageScore has been updated several times. While VantageScore initially had a 501-900 scale, VantageScore  3.0 changed the grading scale to match FICO's, using a 300-850 scale.

Your VantageScore can be based on any of your three credit reports. It uses a slightly different weighting for factors than your FICO score.

Your VantageScore is made up of the following:

• Your payment history (40%)
• Length and types of credit (21%)
• Credit utilization (20%)
• Credit balances (11%)
• Recent credit applications (5%)
• Available credit (3%)

While it's less widely used than FICO, VantageScore is becoming increasingly popular. According to VantageScore, more than 3,000 businesses drew 14.5 billion scores in a 12-month period between 2021 and 2022, an 18% increase since 2019. VantageScore is also often featured in credit monitoring applications such as Experian Boost and Credit Karma.

VantageScore versus FICO score: Similarities and differences

As competing products, FICO and VantageScore scores perform the same functions with slight variations. As you will have noticed, the scoring algorithms weigh various factors differently, but both algorithms heavily consider payment history and credit utilization. Making on-time payments for all accounts and keeping your credit utilization ratio low on revolving credit accounts, such as credit card statements, will put you on track for an excellent score.

Both models now use a 300 to 850 scale and divide this range into five categories. The cutoffs for each risk category vary slightly, but the general concept works out similarly.

Keep in mind that even within the FICO and VantageScore models, you may have different scores across credit reports from each credit bureau. Each credit report may have slightly different data if your lenders report your payments at different times. Some credit building services may only report to one or two of the three credit bureaus. For example, using Experian Boost puts monthly payments for various services like utilities on your Experian credit report, which builds payment history and can raise your credit score. Unfortunately, your Equifax and TransUnion credit reports don't see that benefit.

The differences are too minuscule for most consumers. What's most important is to understand that you have more than one credit score using more than one model.

Just from these two base models of FICO and VantageScore, you have six different credit scores (one score for each of the three credit bureaus)! Taking into account specialty scores for things like insurance, you have many more different credit scores that have varying influences on your finances.

VantageScore 4.0 and FICO 10T

A problem that lenders had with previous iterations of VantageScore and FICO was that they only provided a snapshot into a consumer's credit profile without any insight into the direction their credit score was going toward. That additional context can drastically change the risk assessment for lenders. To address this issue, the credit scoring algorithms received updates: VantageScore 4.0 in 2017 and FICO 10T in 2020. 

These credit scores are calculated similarly to their previous iterations, but they've added another factor: trended data. Trended data looks at the past 24 months of a consumer's credit report, considering payment histories, balances, and credit utilization ratios. These will show if you exhibit a consistent level of credit responsibility, if you're improving, or if you're starting to slip.

Overall, a good credit score is a good thing. Excellent credit can lead to huge savings and opportunities from the best rewards credit cards to the best interest rates on a home loan. The possibilities are endless.

With FICO and VantageScore occupying essential roles in the credit landscape, you should consider tracking both credit scores over time to get the best results. It should give you a good idea of your overall credit from the perspective of a lender. Armed with your credit information, you can make the best long-term decisions.

VantageScore and FICO score frequently asked questions (FAQ)

How do I improve my credit score fast?

To improve your credit score quickly, you can look to services that will add to your payment history, like Experian Boost or credit builder loans. You can also request a credit limit increase on your credit cards, which will decrease your credit utilization ratio. 

How do I see my credit score for free?

The most accessible place to get your credit score for free is any financial institution you're borrowing from, such as a credit card company or bank. You can also get your credit score from various credit monitoring and identity theft protection services. When you're looking at your credit score from any of these sources, take note of which scoring model and credit bureau it is derived from. 

Is VantageScore higher than FICO score?

Your credit score calculated by one model can very well be higher than your score with another because of the differences in how VantageScore and FICO weigh certain factors. That doesn't necessarily mean that VantageScore will always be higher than your FICO score. For example, you may have recently applied for a new credit card, which will affect your FICO score slightly more than your VantageScore since new credit makes up 10% of your FICO score and 5% of your VantageScore.