VantageScore VS FICO Credit Scores: What’s The Difference & How Do They Compare?
Your credit score affects your ability to apply for loans, a mortgage, credit cards, etc., so it's important to understand how your credit score is calculated.
How does the VantageScore vs. FICO question affect you? To answer this, we need to discuss credit scores. Credit scores are a key tool in determining the health of your overall credit history. By distilling your history into a single number, you’ll know if you can apply for that rewards credit card you want or if you’ll first need to improve your credit.
Confusingly, you may see different scores if you check your credit score across other websites. That is likely because these sites use different models to determine your score. Currently, the two most commonly used models are VantageScore and FICO score. Since both models are built and maintained by separate organizations, they have some meaningful differences.
Keep reading to understand the main differences between VantageScore and FICO!
Table of Contents
What Are VantageScore & FICO Credit Scoring Systems?
VantageScore and FICO score are two of the primary credit score models. Their scores help determine applicants’ eligibility for credit cards, loans, mortgages, and other lending situations. These scores measure consumer risk in an easy-to-digest number.
Both models deliver numbers that range between 300 and 850. Before 2013, VantageScore’s scores ranged from 501 to 990. However, it was changed to help consumers and lenders more easily compare across models.
FICO first came about in 1989 via the Fair Isaac Corporation, a data analytics company. The company claims that 90% of the top lenders use its scoring method. Its algorithm is currently in its tenth iteration.
VantageScore, meanwhile, is the new kid on the block, arriving in 2006. Unlike FICO, which is run by a single entity, VantageScore was crafted by the three major credit bureaus: Equifax, Experian, and TransUnion. According to VantageScore, the model “was developed because there was a need for a highly consistent, more predictive scoring model that is easy to understand and apply.”
VantageScore VS FICO: How They’re Different
Separate organizations created the VantageScore and FICO credit models, so they differ in some notable ways. Here are some of their biggest differences:
While VantageScore and FICO both use similar criteria to craft a score, the exact criteria are slightly different — as is how the scores are calculated.
For VantageScore, your score is calculated as follows:
- Extremely Influential: Payment history
- Highly Influential: Type and duration of credit; percent of credit limit used
- Moderately Influential: Total balances/debt
- Less Influential: Recent credit behavior and inquiries; available credit
FICO, meanwhile, breaks down the weight of its credit factors by percentage:
- 35%: Payment history
- 30%: Amounts owed
- 15%: Length of credit history
- 10% Each: Credit mix; new credit
VantageScore previously publicized percentages, with payment history making up 40%, credit age and mix at 21%, credit utilization at 20%, balances at 11%, recent credit applications at 5%, and available credit at 3%. However, they currently use the “influential” monikers, so those percentages may no longer be accurate.
Length Of Credit History
Both VantageScore and FICO require different lengths of credit history for your score to be generated.
VantageScore just needs you to have one month of history and one account reported to credit bureaus within the past 24 months. On the other hand, FICO requires that you have a credit history of at least six months, plus an account that’s reported at least once in the past six months.
According to VantageScore, that model uses machine learning techniques, which allows it to score users with a limited credit history. VantageScore claims this feature enables it to rate between 30 and 35 million people who can’t be scored on other models.
Accordingly, new credit users may be able to see their VantageScore but not their FICO score. Therefore, if you can’t access your FICO score and you only recently opened up your first line of credit, you may need to wait at least half a year before a score shows up.
Importance Of Credit Inquiries
VantageScore and FICO also vary in terms of how they decipher credit inquiries. While both negatively consider credit inquiries and do deduplication, their time spans differ. When it comes to credit scores, deduplication is the process of counting multiple hard inquiries as a single inquiry, limiting the negative impact on your score.
VantageScore deduplicates all credit inquiries within a 14-day window — even those of different types. However, if you have multiple inquiries more than 14 days apart, they’ll be counted as separate, potentially harming your score more drastically than a single inquiry might.
FICO, meanwhile, gives a 45-day window for deduplication. Their deduplication, however, only counts inquiries of the same type. This could be beneficial if you are shopping around for a specific type of loan. However, if you’re applying for different types of credit lines in a very short period, your FICO score may be impacted more than your VantageScore.
Use Of Bureau Data
Both models also take different approaches to how they utilize data from the major bureaus.
VantageScore’s model combines a set of consumer data obtained from the three major credit bureaus. A single formula is then developed based on this information. VantageScore’s data also includes trends based on consumer patterns over time. In some cases, VantageScore uses up to two years of information when making calculations.
FICO, on the other hand, sets its formula based on anonymous data from millions of consumers. It takes data from the three credit bureaus and uses it to develop a model. Additionally, FICO’s model looks at data that’s been reported to those bureaus when scores are generated (as opposed to VantageScore’s trend-based model).
Weight Of Late Payments
While VantageScore and FICO both consider late payments, they treat types of late payments differently. FICO looks at all late payments equally. That means a late credit card payment counts the same as a late mortgage payment.
VantageScore, meanwhile, places a greater weight on certain types of payments. This model specifically considers late mortgage payments more important. So if you have made a late payment on your mortgage, you’ll be more negatively affected than if you’ve missed a car payment.
Additionally, each organization estimates that late payments take different amounts of time to recover from. For VantageScore, a missed payment could take a year and a half to recover, regardless of your prior credit history.
FICO suggests that the recovery time depends on the user’s starting credit score. For instance, a person with a score of 680 will take nine months to recover from a missed mortgage payment. A different person with a score of 720 will take roughly three years, while someone with a score of 780 will take between three and seven years.
That means differences in your FICO and VantageScores can be partly explained by what types of late payments you have on your credit history.
FICO & VantageScore: Average Credit Scores Compared
To give you an idea of where the average American falls under both credit scoring systems, let’s look at the average VantageScores and FICO Scores of Americans by year, going back to 2017.
|Average Score (Year)||VantageScore||FICO|
(Data compiled by WalletHub from MyFICO.com & New York Fed Consumer Credit Panel/Equifax)
Why Do Different Credit Scores Matter?
Because VantageScore and FICO scores are calculated differently, use data differently, and pull information from different sources, you may see credit score variations when comparing across score-checking tools. Depending on which model a creditor uses, your levels of success may vary when applying for different loans or credit cards. By understanding how VantageScore and FICO differ, you won’t be shocked if and when you see differing scores.
That said, the differences in scores should be minimal, meaning the real-life impact of different credit scores should also be minimal. Most creditors will also look at your complete credit history, which should vary even less than your VantageScore vs. FICO score.
Regardless, if you are attempting to improve your credit score, the differences between VantageScore and FICO aren’t very pertinent. Instead, focus on where they’re similar.
Both scoring systems consider your payment history and how much credit you utilize above other factors. As such, paying off bills on time, managing your credit utilization effectively, and checking your credit history for errors are effective ways to boost your credit score — no matter if it’s powered by Vantage vs. FICO.
VantageScore VS FICO FAQs
How To Improve Your VantageScore & FICO Credit Scores
Despite the real differences involved in our VantageScore vs. FICO comparison, these differences should have minimal impact on your scores, ability to apply for loans, credit cards, etc. So long as you practice good credit discipline, you shouldn’t have a problem building and maintaining an attractive credit profile.
If you are struggling with poor credit, find out how to improve it with a credit card. You can also learn more about improving your business’s credit score with our ultimate guide to improving your business credit score.