FICO Score vs. VantageScore: Understanding the Difference

For a long time, the FICO^® Score was shorthand for credit scores in general. And for good reason. FICO was one of the first companies to develop a credit scoring model that analyzed credit reports to help lenders and creditors assess whether borrowers will repay loans on time.¹ Today, FICO and its main competitor VantageScore^® create dozens of different credit scores.

What Is a Credit Score?

A credit score gives creditors an easy way to determine the likelihood that a person will miss a bill payment.²

Most credit scores range from 300 to 850 and are based solely on the information in a credit report from one of the three major credit bureaus — Experian, Equifax or TransUnion.² People with higher credit scores typically tend to miss payments less often.

Creditors consider many factors when deciding who to lend money to and how much to charge. However, they tend to be more willing to approve applications and offer lower fees and interest rates to people with higher credit scores.²

What Is a FICO Score?

A FICO Score is a credit score that FICO develops. Companies can purchase a FICO Score when they request your credit report from one of the bureaus, and the scoring model will calculate your score based on your report at that moment.³

Lenders often use FICO Scores to quickly evaluate a loan or credit card application and to set the rates and terms for new accounts. They can also use FICO Scores when deciding who to send offers to and to help manage customer accounts — such as when they’re evaluating your credit card’s credit limit.³

How your FICO Score is calculated

FICO doesn’t share the specific data points and weighting it uses to determine your credit score. However, they do offer some general guidelines on what affects your FICO Score and the importance of the different types of information:⁴

• Payment history (35%) is your history of making payments on time or missing bill payments. The further you fall behind on payments, the more your credit score might drop. Charged-off accounts, collections and bankruptcy filings can also be negative factors.⁵
• Amounts owed (30%) is the amount you owe overall. How many accounts have balances and the types of accounts with balances can affect your scores. Your credit card balances relative to their credit limits, also known as your credit utilization rate, can also be a major factor in this category.⁶
• Length of credit history (15%) is the average age of the accounts in your credit report, including closed accounts. The age of your newest and oldest accounts can also affect your score.
• Credit mix (10%) indicates whether you have installment accounts (loans) and revolving accounts (credit cards and lines of credit) with balances. Having a mix of different types of accounts can boost your credit score.
• Recent activity (10%) involves new credit. Applying for credit accounts can lead to a hard inquiry, which is a record of when lenders check your credit report to make a loan decision. Hard inquires and opening new accounts can hurt your credit scores; however, with time, your scores can improve if you responsibly manage the new account.⁷

FICO gives each category a percentage to represent the relative importance of that category on an average person’s FICO Score. However, the exact weighting when your score is calculated could depend on what’s in your unique credit report.⁴

FICO vs. VantageScore

FICO and VantageScore are competing companies that develop and sell consumer credit scores. Lenders can use credit scores from either (or both) companies, and there are similarities and differences between the credit scores they report.

• The minimum scoring requirements are different. You need to have a credit account that’s at least six months old and a credit account that was active within the last six months for your credit report to be scorable by FICO. With VantageScore, however, you can have a credit score if you have a credit account of any age.⁶
• FICO offers more models. FICO has been developing credit scores for decades, and it offers dozens of different credit scores. It has base credit scores — such as FICO 8, 9 and 10 — as well as industry-specific scores for auto lenders and credit card issuers.⁸ VantageScore has only five credit scores: VantageScore 1.0 through 4.0 and the newly released 4plus™ model.⁹
• Most of the scores have the same range. Base FICO Scores and the VantageScore 3.0, 4.0 and 4plus range from 300 to 850. However, FICO’s industry-specific models range from 250 to 900.⁶
• Most scores consider only what’s in your credit report. Most FICO and VantageScore credit scores depend entirely on the information in one of your credit reports. However, both companies also offer credit scores that can include your banking data if you choose to share access to your bank account — UltraFICO^® from FICO¹⁰ and VantageScore 4plus from VantageScore.⁹
• They might use different rules and weighting. There can be a lot of information in your credit report, and FICO and VantageScore may use different rules and weighting to determine your score.⁶

You Can Have Many Credit Scores

People sometimes get flustered when they check their credit scores from different sources and don’t get the same results, or when they find out the score a lender used to evaluate their application is different from the score they saw.

Differences aren’t a mistake, and one score isn’t necessarily better than another. You can expect there to be differences in your credit scores for several reasons.

You’re comparing different types of scores

One reason you might see several credit scores is that you’re comparing a FICO Score to a VantageScore.

For example, your credit card issuer might give you free access to your VantageScore 4.0 score while you use a personal finance website to check your credit and get a FICO Score 8. Even if the models analyze the same credit report, their distinct analyses result in different outcomes.²

Or, you might be comparing different models from the same company. For example, a FICO Score 8 based on your TransUnion credit report could result in a different score than a FICO Score 10 based on the exact same credit report.²

The scores are based on different credit reports

Credit scores can also vary depending on whether they’re analyzing your Equifax, Experian or TransUnion credit report.²

Many major lenders and card issuers report information to all three credit bureaus, but some companies only report your accounts and activity to one or two of the bureaus. Even the companies that report to all three might report account information at different times.²

As a result, even if the same scoring model is scoring all three of your credit reports at the same time, the differences in the underlying data could lead to three different scores.

The scores were generated at different times

Some personal finance websites update your credit score only once a week or once a month. If you check your credit score using that website and then check your credit score elsewhere, you might see different credit scores even if the score is from the same model and report.²

What Is Considered a Good Credit Score?

Creditors can set their own thresholds for what they consider to be poor, fair, good and excellent credit. However, FICO and VantageScore also offer some general guidelines.

FICO

FICO separates its score range into five groups ranging from poor to exceptional:¹¹

VantageScore

VantageScore uses four categories with different cut-off points:¹²

Monitor and Improve Your Credit

There are many credit scores, and you might not know which one a creditor will use. However, most credit scores use similar underlying information from your credit report to predict the same outcome. As a result, the actions that you can take to improve your credit scores, such as paying bills on time and minimizing your credit card balances, can often help all your scores.

If you have a credit card from Synchrony Bank, you can track your progress for free. After enrolling and logging in, you can get a free VantageScore 4.0 credit score, based on your TransUnion credit report, with monthly updates.

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Author Bio

Louis DeNicola is a freelance writer who specializes in consumer credit, finances and fraud. He has several credit-related certifications and works with many lenders, publishers, credit bureaus, Fortune 500s and fintech startups.