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.
Learn the key differences between the FICO score and VantageScore, so you better understand how these credit scoring models work.
What's the Difference Between FICO and VantageScore?
|Company||Public company founded in 1956||LLC jointly founded by three major credit bureaus in 2006|
|Scoring criteria||At least 6 months of history for at least one account ("tradeline")||No minimum credit history length; one account ("tradeline") required|
|Weighting||Clear percentage allocations for 5 main categories||"Level of influence" descriptions for 5 categories|
|Treatment of hard inquiries||Multiple inquiries treated as a single inquiry if within 45-day period||Multiple inquiries treated as a single inquiry if within 14-day period|
The FICO score was created in the 1980s by the company formerly known as Fair, Isaac & Co., founded in 1956. It is now known as Fair Isaac Corp., or FICO. The FICO score was intended to help lenders figure out which borrowers were most likely to default on a loan.
The most recent FICO Score version is 9, but version 8 is the most widely used. FICO also creates separate scores specifically for auto loans, credit cards, and mortgages.
VantageScore was created when 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. There have been four versions of VantageScore since its inception.
FICO's credit scoring model requires at least one account or tradeline, which must have been open for at least six months, to create a credit score. You also need to have account activity within the last six months.
VantageScore's credit scoring model works with one account or tradeline and no minimum credit history length.
FICO gives more weight to payment history, while VantageScore's latest version emphasizes total credit usage and balances.
The FICO score's credit scoring formula is based on five categories of information, while VantageScore 3.0 uses six. VantageScore 4.0 uses five categories.
- 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 the 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.
Be aware that a 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.
Treatment of Hard Inquiries
FICO and VantageScore also vary slightly in the way they treat hard inquiries. With FICO, multiple hard inquiries within a 45-day period are treated as a single inquiry.
VantageScore treats multiple hard inquiries as a single inquiry if they occur within a 14-day window.
This is called deduplication, and it's useful if you're comparing rates across several lenders, such as when mortgage shopping.
FICO uses a score range of 300-850.
VantageScore 3.0 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
VantageScore 4.0, which was released in April 2017, didn't change the tiers and ranges from 3.0.
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 also 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.
The Bottom Line
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.