When it comes to credit scores, two big companies rule the industry. The oldest and best-known is FICO, but relative newcomer VantageScore® is also important. While both share the same goal of measuring consumers’ creditworthiness, the two companies approach it a bit differently. Here’s what you should know about FICO Scores and VantageScores.
History of The VantageScore and FICO Credit Scoring Models
The FICO Score was first developed by Fair Isaac Corporation in 1989. The base FICO Score can be used by a variety of lenders and creditors. Over time, new versions of this score have been introduced. Currently, the most commonly used version of the base FICO credit scoring model is the FICO® Score 8 (launched in 2004). The most recent models are the FICO Score 9 (launched in 2014) and FICO Score 10 and 10 T (launched in 2020).
In addition to the base FICO Scores, there are also industry-specific FICO Scores that are used by lenders and creditors in industries such as credit cards or auto lending.
VantageScore was developed by the three major consumer credit bureaus—Experian, TransUnion and Equifax—working together. It has four base credit scoring models. The first, VantageScore 1.0, was introduced in 2006; the most recent, VantageScore 4.0, was released in 2017. VantageScore doesn’t have any industry-specific versions.
The Differences Between VantageScore Scores and FICO Scores
Both the FICO Score and VantageScore credit scoring models aim to evaluate individuals’ creditworthiness based on their past use of credit. But there are some key differences in the criteria the two models use. Here’s a closer look.
Length of Credit History
In order to have a FICO Score, your credit report must list at least one credit account at least six months old and must show activity on at least one credit account in the past six months. If you are new to credit—for instance, you just got your first credit card and don’t have a student loan or car loan—FICO may not be able to generate a score for you yet.
VantageScore can generate a credit score if your credit report shows at least one credit account, even if the account is brand new.
Tax Liens and Civil Judgments
Consumer credit reports used to include information from public records, such as parking tickets, tax liens and civil judgments. As of July 2017, however, the three consumer credit bureaus no longer show public records data on credit reports. Since your credit score is based on information in your credit report, tax liens and civil judgments won’t affect either your VantageScore or your FICO Score.
Credit Inquiries
Whenever you apply for credit, it generates a hard inquiry into your credit report. This can temporarily cause your credit score to dip. To avoid penalizing you for shopping around for credit, both the VantageScore and FICO Score models consider applications for the same type of credit within a certain period as one inquiry.
With VantageScore, any hard inquiries within a 14-day window are treated as one, even if they are for different types of credit (such as a credit card and a mortgage).
Older FICO Score models give you a 14-day window; more recent models give you 45 days. However, this window only applies to student loans, auto loans and mortgage loans.
Trending Data
Your credit utilization ratio indicates how much of your available credit you’re using. FICO Scores and most VantageScore credit scoring models consider only your most recently reported credit limits and account balances when calculating this ratio. However, VantageScore 4.0 considers up to two years of trending credit utilization to generate a more complete picture of how you manage credit. For example, do you normally pay your balance in full, or do you just pay the minimum?
Industry specific Scores
In addition to base FICO Scores, FICO also has industry-specific scores that lenders use for certain types of credit products. Auto lenders generally check your FICO Auto Score 8; credit card companies typically check your FICO Bankcard Score 8. Most mortgage lenders look at FICO Score 2, 4 or 5. Industry-specific scores aren’t accessible to consumers.
VantageScore and FICO Scoring Factors
Both FICO Scores and VantageScores weigh the same five general factors.
- Payment history. Making on-time payments will help your credit score; late or missing payments or having debts go to collections will hurt it.
- Credit usage. This reflects how much of your available credit you’re currently using. In general, using 30% or less of your available credit will benefit your credit score, which is why you should strive to keep credit card balances low.
- Length of credit history. The length of time you’ve had credit accounts affects your credit score, which is why people who are new to credit generally have lower credit scores than those with decades of experience.
- Types of accounts. A history of responsibly managing different types of credit accounts, including revolving credit such as credit cards and installment credit such as student loans, can help improve your credit score.
- Recent activity. If you apply for a lot of new credit in a short time, it can negatively affect your credit score, because it might signal that you’re having financial trouble and using credit to get by.
However, FICO Scores and VantageScores weigh these factors somewhat differently. VantageScore 4.0 weighs credit usage and available credit most heavily, followed by credit mix, with payment history only moderately influential. For FICO Scores, your payment history is the most important factor, accounting for 35% of your credit score, followed by credit usage, which accounts for 30% of your score.
VantageScore and FICO Credit Score Ranges
Both the base FICO Scores and the latest VantageScore models, 3.0 and 4.0, range from 300 to 850. In general, a FICO Score of 670 or more or a VantageScore of 700 or more mean you have good credit. Here’s a more detailed breakdown of what various credit scores mean.
FICO Score Credit Score Ranges
- 800-850: Exceptional
- 740-799: Very good
- 670-739: Good
- 580 to 669: Fair
- 300-579: Poor
VantageScore Credit Score Ranges
- 750-850: Super prime or excellent
- 700-749: Good
- 650-699: Fair
- 550-649: Poor
- 300-549: Very poor
How to Get Your VantageScore® and FICO® Credit Scores?
Your bank, credit card company and a variety of third-party websites may offer access to both types of credit scores, either free or for a fee. For example, Experian lets you check your FICO Score for free. If your score isn’t where you’d like it to be, you can help improve it with Experian Boost™, a free service that adds positive payment information from utility, cell phone and streaming service companies to your credit report. While you’re at it, consider signing up for identity theft protection from Experian, which can help you monitor your credit and improve your credit score.
FAQs About VantageScore vs FICO Scores
It’s not a matter of which is better. Different lenders use different credit scores in making credit decisions based on their own rules and their industries. Since the FICO Score 8 is the most commonly used score, this is the most important score to keep an eye on.
In addition to the different versions of the FICO Score and VantageScore, and the different weighting they give to certain factors, scores may not be developed using the same information. Not all lenders report to all three consumer credit reporting agencies. In addition, they may provide reports at different times of the month. And credit scores may be generated at different times. All of these factors can affect your credit score.
Although FICO Scores are used by 90% of lenders, VantageScore is growing in popularity. Creditors are free to use any credit scoring model they want; many lenders use multiple credit scores when making their decisions. Lenders who want to take trending data into account or to assess the creditworthiness of a young consumer, for instance, might use VantageScore 4.0.
You can check your FICO Score for free at the Experian website; the version you’ll see is your FICO Score 8. Your bank or credit card issuer may also offer a free credit score. Many third-party websites also provide credit scores either free or for a fee.
Because VantageScores and FICO Scores measure the data in your credit report differently, you can’t convert one to the other. However, since both scores reflect how well you manage debt, there shouldn’t be a huge difference between them. If you keep your credit utilization low, pay down your debt and pay your bills on time, both your VantageScore and FICO Scores should benefit.
