VantageScore vs FICO Score: What's the Difference and Which is Best? (2023)

If you check your balance on any free site, you've probably already seen your VantageScore. However, you may not have realized that this credit score does not match your FICO score.

So what is a VantageScore and how is it different from a FICO credit score? Is one better than the other? Let's compare and contrast the two types ofcredit scoresand discuss the merits of each in this article.

What is a Vantage Credit Score?

The VantageScore credit score, sometimes referred to as the "Vantage Credit Score", is a credit scoring model created in 2006 bythree major credit bureaus(Experian, TransUnion, and Equifax) to compete with FICO credit scoring models.

VantageScore is a tri-bureau credit score, which means that each credit bureau uses the exact same model.

The most widely used version of VantageScore by lenders today is the third iteration of the credit scoring model, VantageScore 3.0.

VantageScore Solutions, LLC has released VantageScore 4.0, which it claims is more accurate than previous versions, but as lenders are slow to adopt new credit scoring models, most still use VantageScore 3.0.

Who uses VantageScore?

Laut ExperianVantageScore is used by lenders for all types of loans except mortgages, where FICO remains the dominant player. The largest group of financial institutions that use VantageScore are credit card issuers.

Non-financial institutions such as landlords and utilities are also increasingly adopting VantageScore.

VantageScore is also commonly used by consumer websites that provide student credit scores and market credit products.

What is my Vantage Score?

It's easy to find out your VantageScore for free. Credit Karma offers free VantageScore 3.0 credit scores from TransUnion and Equifax, so all you have to do is create an account at creditkarma.com and log into your Credit Karma account to view your free Vantage credit score.

Sesame Creditjnerd walletare other sites that provide consumers with free TransUnion VantageScore 3.0 credit scores.

VantageScore versus FICO-Score

The main difference between VantageScores and FICO scores is what they are used for.

FICO scores have been in use for a long time and are therefore most commonly used by lenders to make lending decisions.According to US news, FICO scores are used by 90% of “top lenders”.

While VantageScore credit scores are also used by some lenders, they are best known for their use as an educational tool.

Both FICO and VantageScore consider the same general categories of information about yourcredit report(although they use slightly different terms to describe them), including:

• payment history
• credit utilization
• Credit history length/age
• Mixing accounts/credit types
• New credit/current credit activity

As the ratings share the same general categories, it can be assumed that both are supported by the same common sense behaviors that lead to good credit, eg, B. Not using too much of your available credit and not delinquent.

However, FICO and VantageScore assign slightly different weights to each category, as shown in the table below (percentages are approximate).

Within those broader categories listed above, scoring models also have different ways of assigning a value to specific variables. Here are some examples.

• the consultation

difficult requestsThis can usually lower your score by a few points, as seeking new credit is considered risky behavior.

When people apply for some types of loans, such as mortgages, car loans, and student loans, they tend to apply for multiple loans to get the best rates. Credit scoring models now have multiple ways to explain this behavior to avoid penalizing consumers for purchases.

The latest FICO evaluates group claims of the same type over a 45-day period. This means consumers can apply for 5 car loans in 45 days and that counts as just one application. Older FICO scores do this within a 14-day window.

FICO scores apply this rule only to student loans, mortgages, and car loans—no credit cards. Aftertarjetasdecredito.comThe FICO scoring model also includes a 30-day "buffer" against difficult queries, which means it ignores all queries that occurred in the last 30 days.

VantageScore, on the other hand, aggregates all requests made within a 14-day window, regardless of account type. You could apply for a few credit cards, a student loan, a mortgage, and a car loan within 14 days and that would only count as one appointment.

• collections

I do not payCharges on your credit reportThey will always significantly affect credit scores, but paid bills and low balance bills are treated differently between FICO and VantageScore.

With FICO 8, the most used credit score by lenders today, all without payingjFees paid are harmful regardless of account type. FICO 9, a newer version of the FICO score, omits paid billing accounts and specifically reduces the impact of unpaid medical bills. Both FICO 8 and FICO 9 ignore fees if the original balance is less than $100.

VantageScore 3.0 and 4.0 are similar to FICO 9 in that they do not count paid billing accounts and place less importance on medical charges, but do not make exceptions for low balance charges.

• to use

Whilecredit utilizationWhile both scoring models treat it very similarly, the specific thresholds that affect creditworthiness vary. VantageScore recommends keeping your credit utilization below 30%, while manyexperts believethat FICO scores suffer from lower usage rates.

Interestingly, the new VantageScore 4.0 looks into thisUsage trends over timeas if their balances had increased or decreased. FICO Scores and earlier versions of VantageScore only look at the data that is on your credit report at the time your score is calculated and do not "look back in time".

Other differences between VantageScore and FICO

• Triple Office vs. Single Office

On FICO, each credit bureau uses a different version of the score.specific to this office. As a result, consumers often have different credibility scores with each Schufa.

However, VantageScore is designed to work the same for all three credit bureaus to reduce differences in scores between credit bureaus.

• Who can be evaluated

The two types of scoring models have different requirementswho can be ranked.

FICO requires at least six months of credit history and at least one account reported within the last six months. That is, if you're fairstarting with building credit, you must wait six months after opening your first account to obtain a FICO score.

On the other hand, VantageScore can evaluate consumers with only one month of credit history on at least one account reported in the last 24 months.

• credit score scale

Previous versions of VantageScore had a different scale than the scale used by the FICO score. For example, VantageScore 2.0 ranged from 501 to 990. The VantageScore 3.0 range was changed to match the FICO credit score scale of 300 to 850.

However, they have a slightly different classification.Scalewithin these credit score ranges, as you can see in the table below.

What is a good Vantage score?

From the table above we can see that a good VantageScore is between 661 and 780. Compare this to the FICO Good Credit Score which is a narrower range of scores from 670 to 739.

Likewise, an excellent VantageScore credit score ranges from 781 to 850, while an "exceptional" FICO credit score ranges from 800 to 850.

Is there a VantageScore to FICO conversion formula?

Unfortunately, there is no Vantage to FICO conversion formula that you can use to calculate your FICO score from your VantageScore and vice versa.

Just like we did in our VantageScore vs. FICO, the two scoring models assign different values ​​to each credit rating category and even have slightly different categories.

They also use several proprietary algorithms, the details of which are closely guarded trade secrets.

To complicate matters further, FICO and VantageScore use"Data" Credit Scoreor "scorecards" to categorize consumers. Each scorecard has a different way of measuring consumers. In other words, the details of credit score algorithms vary for different consumers, even within the same credit score version.

Because each credit score is so complex, and because we as consumers don't have access to the secret algorithms, there isn't a reliable or accurate way to convert between the two.

Why is my Vantage score lower than FICO?

Because VantageScore and FICO scores differ in the weight they assign to each category and variable within the scoring model, it is likely that one will be lower than the other in general.

Because payment history weighs more heavily on VantageScore than FICO (40% vs. 35%, respectively), late payment may lower your VantageScore slightly more than your FICO score.

Another reason for a lower VantageScore could be a low unpaid balance.account to allon your credit report, which hurts your VantageScore but not your FICO score of 8 or 9.

However, what people most often see is that your VantageScore is slightly higher than your FICO score, as VantageScore seems to be more forgiving when it comes to value.credit utilization.

Which credit score is better?

Unfortunately, there is no straight answer to the question of which credit rating is better than the other. Each credit score has value for its own purpose.

Although some people consider the VantageScore to be a "fake" or inaccurate version of a FICO score, this is not necessarily a fair comparison. While both scores emphasize the same general credit principles, they have significant differences in how they treat specific factors. VantageScore is meant to be a FICO competitor, not an exact replica, so we shouldn't expect them to be the same.

However, as both scores work according to the same general principles, what works for one usually works for the other. That's why VantageScore, despite its differences from FICO, has been so successful as an educational score offered by many free sites.

While consumers often have to pay to get their FICO score, they can monitor their credibility and get a good idea of ​​what's affecting their score for free using consumer websites that use VantageScore. They can then take actions that will help improve both VantageScore and FICO.

So for generalcredit buildingVantageScore is intended to be as useful as FICO.

However, it's important to note that most lenders still use FICO scores, and many lenders use older versions of FICO that may be less comparable to VantageScore credit scores. For example, if you're applying for a mortgage soon, you'll probably want to get your FICO score in addition to your VantageScore, since mortgage lenders predominantly use FICO in their lending decisions.

VantageScore and FICO scores are important to consumers as VantageScore becomes more popular with lenders.

What do you think of the VantageScore credit score? Have you compared your VantageScore to your FICO score? We'd love to hear your thoughts in the comments.