FICO Score vs. VantageScore: What’s the Difference?

fico score

Your credit score is one of the most important aspects of your overall financial profile. Potential lenders and creditors will use your credit score to determine what kind of risk they are taking by giving you a loan or a line of credit. Essentially, your credit score is your entire credit and financial history all boiled down to one number. Consequently, you may be surprised to know that there are actually many different ways to calculate a credit score. The two most popular ways to estimate your credit score are using the FICO scale and the VantageScore scale. Below, we will discuss the differences between them and how they can impact your credit score.

Details of your debt and financial history are reported to three major credit bureaus: TransUnion, Experian, and Equifax. These institutions will compile your payment history, total debt, amount of unused credit, the diversity of your credit lines, and other financial data to create your credit report. That data is then run through an algorithm which will provide the three-digit number that is your credit score. These three bureaus compile data and store your information differently, which can mean your credit report—and therefore your credit score—will look different depending on the scoring system used.

The FICO Score credit scoring model ranges from 300 (very poor credit) to 850 (EXCELLENT credit). This is the most well-known scoring method, and over 90% of big lenders in the country use the FICO credit scoring method. While there are many different versions of the FICO method, FICO8 is used most often by lenders today. While FICO doesn’t like to give out a lot of information on how they compile data, the rough breakdown of your FICO8 credit score is: 35% payment history, 30% amounts owed, 15% length of credit history, 10% new credit, and 10% credit diversity.

In 2006, the credit bureaus created the VantageScore as an alternative to the FICO Score. Vantage is similar to FICO. It still ranges from 300 (poor credit) to 850 (incredible credit) and there are multiple versions of the VantageScore method. The current industry standard is VantageScore 3.0. The biggest difference between VantageScore and FICO is that VantageScore doesn’t value the length of your credit history. While FICO requires you to have 6 months of data, VantageScore has zero time requirements. The components of the VantageScore system are also different: 40% payment history, 21% depth of credit, 20% credit utilization, 11% balances, 5% recent credit, and 3% available credit.

There are several ways to access your FICO Score and your VantageScore. Some big banks and issuers will offer their customers their credit scores on their monthly statements. Chase Bank, Capital One, and OneMain Financial use VantageScore while Bank of America, Discover, and Citibank prefer FICO. Experian also offers free access to your FICO Score and VantageScore. Keep in mind, though, that your FICO Score and VantageScore can vary from credit bureau to credit bureau, so Experian may provide a different score than TransUnion or Equifax even if they are using the same scoring method.

If there is one big takeaway from comparing these two credit scoring models, it’s that payment history is the most important factor that goes into determining your credit score, regardless of the model used for calculation. Despite their similarities, however, the differences in methods can result in some deviations where your credit score is concerned. This is why it doesn’t hurt to know what your credit score is under both scoring methods. Regardless of differences, as long as you keep up with at least one model, you should have a good idea of your financial standing in the eyes of creditors.

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