FICO Score vs. VantageScore
There are two types of credit score that are intended to quantify how creditworthy you are. Both the FICO Score and VantageScore use a credit range of 300 to 850, with a higher number indicating greater creditworthiness. There are, however, some key differences in how the two scores are calculated, including FICO giving more weight to payment history and VantageScore's latest version emphasizing total credit usage and balances.
Credit Score Ranges
The third version of VantageScore, which is called VantageScore 3.0 and was launched in 2013, adopted the 300-850 range used by FICO. The credit tiers within that range are as follows:
- 781-850 = Super Prime
- 661-780 = Prime
- 601-660 = Near Prime
- 500-600 = Subprime
- 300-499 = Deep Subprime
Earlier versions of VantageScore used a 501 to 990 range. VantageScore 2.0, which was released in October 2010, and VantageScore 1.0, which was launched in March 2006, also assigned a letter grade to a credit score, depending on where it fell within the following ranges:
- 901-990 = A, Super Prime
- 801-900 = B, Prime Plus
- 701-800 = C, Prime
- 601-700 = D, Non-Prime
- 501-600 = F, High Risk
The latest version of VantageScore, 4.0, was released in April 2017. The tiers and ranges didn't change from 3.0.
The most recent FICO Score version is 9, but 8 is used more often as of February 2020. FICO also creates separate scores specifically for auto loans, credit cards, and mortgages.
Credit Score Calculation
- 35% payment history
- 30% level of debt/amounts owed
- 15% age/length of credit history
- 10% types of credit/credit mix
- 10% credit inquiries/new credit
- 40% payment history
- 21% age and type of credit
- 20% percent of credit used
- 11% total balances/debt
- 5% recent credit behavior and inquiries
- 3% available credit
VantageScore 4.0 changed the scoring criteria a bit, consolidating to five factors and making payment history less important. It also no longer gives a percentage for each criterion; instead, it says how influential each one is.
- Extremely influential: total credit usage, balance, and available credit
- Highly influential: credit mix and experience
- Moderately influential: payment history
- Less influential: age of credit history
- Less influential: new accounts
Payment history considers missed payments, including their size and how recently they occurred. The age of credit history criterion typically involves the age of your oldest account, your newest account, and the average age of your accounts as well as how long ago you last used accounts. Credit mix involves the different types of credit you've utilized, including bank credit cards, retailer credit accounts, installment loans, finance company accounts, and mortgage loans. Recent credit behavior/new accounts considers whether you've just opened several new credit accounts. Credit inquiries are made by potential lenders to ascertain your creditworthiness for a specific loan or other request for credit.
What the Scores Don't Consider
FICO says its score doesn't take into consideration your race, color, religion, national origin, sex, or marital status, any of which would be illegal under federal law. It also ignores your age, salary, occupation, and employment history as well as where you live and the interest rate you're being charged on a credit card or other account.
FICO says it excludes child or family support payments you are obligated to make and does not change your score based on requests for a credit report by yourself, an employer, or a lender for the purpose of making a promotional offer or a periodic review. It also doesn't consider whether you are using the services of a credit counselor.
VantageScore's website says it doesn't take the following factors into consideration: your race, color, religion, nationality, gender, marital status, age, salary, occupation, title, employer, employment history, total assets, or where you live.
History of the Scores
The FICO score was created in the mid-1980s by the company formerly known as Fair, Isaac & Co. and now known as Fair Isaac Corp., or FICO for short. The FICO Score was intended to help lenders figure out which borrowers were most likely to default on a loan.
The three major credit reporting companies—Equifax, Experian, and TransUnion—formed a joint venture called VantageScore Solutions LLC and, in 2006, launched VantageScore 1.0. VantageScore was designed to provide consistency among the credit scores offered by the three credit reporting companies, which are sometimes referred to as credit bureaus.
From your standpoint as a consumer, the better credit score to consider is the one your prospective lender will use to approve or decline your application for credit. Since more lenders use the FICO Score, you may be better off checking that score. You shouldn't assume that, however. Always ask your lender which credit score they'll be checking.
Many websites offer a free VantageScore 3.0 score, including CreditCards.com, CreditKarma, LendingTree, and Nav. Experian, Equifax, and myFICO offer free FICO Scores.
Be aware that the credit score you obtain on the internet probably won't perfectly match the one the lender receives, but it can give you a good idea of where you stand.