Home > Credit Score > FICO vs. VantageScore: 5 Differences You Should Understand

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When you think credit score, you probably think FICO. Since the Fair Isaac Corporation introduced its FICO scoring system in 1989, “What is my FICO score?” has become a common question. FICO scores have burrowed their way into all kinds of lending decisions, most notably mortgages, credit cards, and rentals.

But over the last decade or so, FICO’s market dominance has been challenged by a newcomer called VantageScore. As the result of a collaboration between the three major credit reporting agencies (CRAs)—Experian, Equifax, and TransUnion—VantageScore uses similar scoring methods to FICO but with slightly different results.

So what are the differences, and more importantly, do they really matter to you, the consumer? The short answer: usually no. But you might want to look at different scores for different needs or goals.

In this article, we’ll cover the five main differences between FICO and VantageScore and tell you which one to watch.

1. Difference in Scoring Models

FICO and VantageScore aren’t the only scoring models on the market. Lenders use a multitude of scoring methods to determine your creditworthiness and make financial decisions. But despite the numerous options, FICO and VantageScore are likely the only scores you’ll ever personally see.

How do FICO and VantageScore rate you? Both use the same basic criteria:

  1. Payment history
  2. Length of credit
  3. Types of credit
  4. Credit usage
  5. Recent inquiries

Although both FICO and VantageScore consider much of the same information, they gather their data in different ways.

FICO bases its scoring model on credit reports from millions of consumers at once. They gather these reports from the three major credit bureaus and analyze the reports’ anonymous consumer data to generate an accurate scoring model.

Alternatively, VantageScore uses a combined set of consumer credit files, also obtained from those same three credit bureaus, to come up with a single formula.

Both FICO and VantageScore issue scores ranging from 300 to 850. In the past, VantageScore has used a range of 501 to 990, but the range was adjusted when VantageScore 3.0 was issued in 2013. VantageScore’s numerical rankings now match FICO’s, which makes it easier for consumers and lenders to implement the VantageScore model—plus, it’s less confusing for consumers who check both their FICO score and VantageScore.

2. Variance in Scoring Requirements

If you don’t have a long history of credit, VantageScore is the score you want to monitor. Before it’s able to establish your credit score, FICO requires at least six months of credit history and at least one account reported to a CRA within the last six months. VantageScore only requires one month of history and one account reported within the past two years.

Because VantageScore allows a shorter credit history and a long period for reported accounts, it’s able to issue credit ratings to millions of consumers who wouldn’t qualify for FICO scores. Considering how everyone from employers to landlords want to see your credit score these days, if you’re new to credit or haven’t been using it recently, VantageScore might be able to prove your trustworthiness before FICO has enough data to issue a rating.

3. Significance of Late Payments

A history of late payments will impact both your FICO score and your VantageScore. Both models consider these factors:

  1. How recently the last late payment occurred
  2. How many of your accounts have had late payments
  3. How many payments you’ve missed on an account

However, while FICO treats all late payments the same, VantageScore judges them differently—it penalizes late mortgage payments more harshly than other types of credit.

If you’ve had late payments on your credit cards, they will have about the same impact on both your FICO and your VantageScore. But if you’ve had late payments on your mortgage, you might find you have a higher FICO score than VantageScore.

4. Impact of Credit Inquiries

You’ve probably heard you shouldn’t open too many credit cards in a short period of time. One reason for this is every time you apply for a credit card, the lender does a “hard inquiry” to check your creditworthiness.

VantageScore and FICO both penalize consumers who have multiple hard inquiries in a short period of time, and they both do “deduplication.” Deduplication is important for things like auto loans, where your application may be sent to multiple lenders, thereby resulting in multiple inquiries. Both FICO and VantageScore don’t count each of these inquiries separately—they deduplicate them, or consider them one inquiry.  However, the timespan they use for deduplication differs.

FICO uses a 45-day span to deduplicate your credit inquiries. VantageScore limits its focus to only a 14-day range. VantageScore also looks at multiple hard inquiries for all types of credit, including credit cards. FICO considers only mortgages, auto loans, and student loans.

Inquiries aren’t your biggest concern when it comes to your credit score, but they do have an impact. If you want to buy a house or a car, restrict hard inquiries as much as possible to avoid lowering your credit score.

5. Influence of Low-Balance Collections

VantageScore and FICO both have penalties for accounts sent to collection agencies. However, FICO might give you a bit more of a break when it comes to low-amount collection accounts.

FICO ignores all collections where the original balance was under $100. It also doesn’t count collection accounts you’ve paid off. VantageScore, on the other hand, ignores only paid collection accounts, regardless of the original balance amount.

Keep Your Credit High

Regardless of the differences between FICO and VantageScore, the essential advice for keeping your credit score high remains the same:

  • Avoid late payments. Pay your bills, and pay them on time.
  • Keep your credit balances low. Don’t max out your credit cards, and try to keep your cumulative balance to less than 30%—the lower the better.
  • Apply for new credit only when you have to. Don’t open a bunch of new cards in a short period of time, and don’t close old accounts without good reason.

Check Your VantageScore Monthly

You can get a free VantageScore 3.0 credit score, updated monthly, from Credit.com. You can also see how your score compares to others and get a custom action plan for your credit. Remember, every point counts when it comes to getting the best interest rates and lending terms.

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  • http://www.eCredable.com Steve Ely

    Outstanding explanation of the differences of these two scores. As long as consumers focus on good financial habits and pay their bills on time, the score will generally take care of itself.

    • Barry Paperno

      Isn’t that the truth, Steve! But you’ve got to admit that credit reports and scores can present some head-scratching surprises, even for those who manage their credit perfectly.

  • http://www.creditplus.com Adam Pope

    I recently had a client who’s borrower had a $5 collection on their file in error. They had it removed and score went up 54 points! I was always told FICO ignores small collections, but no way to explain that. Nothing else changed on the file?

    • Barry Paperno

      I knew someone would bring up this excellent point, Adam! Most likely, the score in question was not FICO 8, the latest version of FICO. The older versions don’t exclude collections of any amount. (Note: I added a reference to this in the above post after the initial publication, and no doubt after you read it.)

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  • http://www.Credit.com/ Gerri Detweiler

    Hi Tina –

    We compared FICO and Plus score ranges in this article: The Credit Score Range. The FICO score goes up to 850 and the Plus score goes to 830 so all other factors being equal, a similar Plus score will likely be a little lower.

  • http://www.Credit.com/ Gerri Detweiler

    Liss,

    I truly wish I had a simple answer for you. My first thought is that when those negative items came off your credit reports you “jumped scorecards.” Within scoring models consumers are further segmented into buckets and compared to other consumers in those groups. When the serious derogatories were no longer reported you may have moved into another group.

    My other thought is that perhaps you removed more recent information which affects how your score is calculated.

    And that’s the problem with quick fixes like this; there is so much going on within the scoring model that it is really hard to tell which items will have exactly what effect.

    The only thing I can think of that might have a positive effect is if someone you live with can add you to a positive longstanding credit card account – “piggybacking” – but that may or may not work as we wrote about here: The Credit Building Trick That Won’t Help You Buy a Home

    As for comparing the Experian NES score with FICO, I wouldn’t suggest you do that. Even if you knew how the numbers correspond, the individual variables both scores consider may be treated differently. So right now your goal should be to focus just on the FICO scores used by your mortgage lenders.

    That’s not to say you didn’t do the right thing. Cleaning up these negative items will help in the long run but clearly it is not helping you in the short term.

    There is a tool called CreditXpert that some loan officers use to help borrowers like you. Have you asked your loan officer if he or she has access to it and can run an analysis for you? It is supposed to show them legitimate ways to get your scores up based on the credit scoring models lenders use.

  • http://www.Credit.com/ Gerri Detweiler

    Glad I can help though I wish I could offer you more specific suggestions. My concern with a secured card is that it will be a new account and so it’s not going to provide that much of a credit reference. I wonder if it’s worth talking to another mortgage lender with more experience on the credit side…

  • http://www.Credit.com/ Gerri Detweiler

    It may be a different model. Do they tell you which model they are using? (There is more than one Experian score…)

  • http://www.Credit.com/ Gerri Detweiler

    The VantageScore you are getting through TU must be VantageScore 2 which runs on a scale of 501 – 990. So that is quite a different scale to begin with. The other VantageScore you got may be VantageScore 3 which runs from 300 – 850. I know it gets confusing! We talked about the different credit scoring scales in this article: What Is a Good Credit Score?

  • http://www.Credit.com/ Gerri Detweiler

    That certainly is a big difference. Are both scores based on information from the same credit reporting agency? When you say “true” FICO score what do you mean–did you purchase it directly from FICO and have you confirmed the score range is 300-850? (One FICO score provided by a major card issuer, for example, goes up to 950.)

  • Funguy 2020

    Why am I feeling that the Vantage Score is not taken very seriously, and was created to make the consumer feel good, with an artificially-high score? That’s like changing the 2 points you get for scoring a basket in basketball, to 4 points. Same game, just double the points.

    • Yuliya Zborovskaya

      ugh so true, most places still use the FICO, so when i checked creditkarma for my “credit score” it said 640 (they use the vantage), tried to apply for preapproval for a mortgage, they use FICO and my credit score was really 588. huge difference, and i obviously got denied.

  • Eve Rizzageno

    Can you tell me if the VantageScore® credit score is similar to the score a lender would pull if they used FICO? I have been working on improving my score for awhile now and have frequently pulled a score through sites such as CreditKarma and other ” free score” sites that are higher than a lender might . Like Lisa below, It’s very frustrating and disappointing. I just pulled an updated score from Quizzle today 9/11/16 that is 653 which is wonderful as I am trying to be pre-approved for a USDA loan however I don’t want to contact the lender and have him pull up a FICO score that is below 640.
    Is the VantageScore a reliable indicator or should I pull up a FICO and if so, which site is most accurate? Thanks.

    • Jeanine Skowronski

      It’s a bit like comparing apples to oranges. Both scoring models have differences and similarities, but even if we were to break all those down, it still might not reflect the score your lender is looking at, since they may have a proprietary version of either. What you want to do is track a single consumer score over time as your work to improve and focus on information on your report summary — what areas are you scoring well on? What areas can you do better? You also should focus on what range you fall in to get an idea of how creditworthy you may be to lenders. Here’s a quick rundown:

      Excellent Credit: 750+
      Good Credit: 700-749
      Fair Credit: 650-699
      Poor Credit: 600-649
      Bad Credit: below 600

      You can view your scores for free on Credit.com here: https://www.credit.com/free-credit-report-card/

      Thanks,

      Jeanine

      Thanks,

      Jeanine

      • Eve Rizzageno

        Thanks Jeanine. this scoring system in not helpful to the consumer at all. I found out recently that companies have to pay monthly to keep the negative reporting on a person’s record. Is that accurate? How about positive reporting?
        I pulled my credit score from several different sites on 9/12/16 and the numbers are all over the place. Is it possible to get pre-approved now with these scores? I surely do hope so. I have very little debt right now and am going to pay down significantly my current credit card debt which is only 1500.00 next week. It should only be about 600.00 total debt after that. How long before I see a bump in my low credit scores? Will it take 30 days?
        Here are my current scores. Weird how wildly spread the numbers are.
        Equifax: FICO® Score 8
        powered by Equifax 727
        Transunion: FICO® Score 8
        powered by Transunion 615
        Experian: FICO® Score 8
        powered by Experian 601
        Transunion Vantagescore 653
        Credit.com score: 670

        • Jeanine Skowronski

          Companies pay to pull reports from the bureaus and as part of the deal report to the bureaus. Is that what you’re thinking of? Negative info can stay on reports for 7 years , by law. Some bankruptcies can stay on for 10. Companies can’t continue to report after those windows, so if you have info on your credit report that is older than that, you can dispute it.

          You can find more info here:

          https://www.credit.com/credit-repair/how-long-do-things-stay-on-your-credit-report/

          Thanks,

          Jeanine

  • Jeanine Skowronski

    It depends on what score they’re using — which could even be different from the two scores you mention. That being said, there are a few things you can do to try to give your credit (and all your scores) a quick boost. More info here:

    https://www.credit.com/credit-scores/articles/how-to-quickly-improve-credit-score/

    Thanks,

    Jeanine

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