What are the Differences between the VantageScore and the FICO score?


Having a good credit score is important to every American as it affects many things we encounter in our daily lives: credit cards, loans and even car insurance.  There are many places you can get a credit score: your bank, online and you may even be given a summary of your scores when you apply for a new loan.  You may have heard the term FICO score and VantageScore: which score are you getting and does it matter?

The FICO score

Before the credit scoring system, bankers accessed a person’s credit by weighing such factors character, relationship with the bank, reputation and whether they paid their bills on time.  They didn’t have any quantitative way to analyze whether or not a customer was a good risk: lenders had neither the predictive data nor the math to calculate a customer’s ability to pay back a loan.  This changed in the 1950s, when Bill Fair, an engineer, and Earl Isaac, a mathematician, got together and laid out the foundation for what would be the FICO credit score.  The company they founded was called Fair Isaac (it was renamed FICO in 2009).  The score was initially a flop; they only had a few customers in the beginning and they struggled to market the concept of computerized credit scores.  The technology and methodology of data collection was improved over the years and eventually, in the 1980s, the credit score became available to most lenders, and was widely adapted to screen prospective credit applicants by 1995.

There have 7 versions of the FICO score released over the years, the latest being FICO 9. In addition, there are many different “flavors” of your FICO score, like a score tailored to the auto industry, the credit card industry and score models designed with other loan products in mind.


Credit scoring is big business.  Not only do lenders buy the scoring models, but credit scores are sold to consumers. For a while, FICO had a real monopoly on the sale of credit scores and credit score models.   In an attempt to compete with FICO, the credit bureaus developed their own scoring system, the VantageScore.  VantageScore has had 3 incarnations: VantageScore 1.0, VantageScore 2.0 and VantageScore 3.0.

Initially, the VantageScore point system scored between 500 and 950, but to win over more customers,   they thought it best to mimic the FICO system score range of 300 – 850.

Which Score am I Seeing?

As we mentioned, there are many versions of both the FICO score and the VantageScore.  Lenders are slow to adopt new technologies, so while FICO 9 has been around for a couple of years now, most lenders are still using FICO 08 or even FICO 04.  Where you get your credit score matters; if you get your credit score from:

  • A lender during the course of the loan, you will most likely be getting a FICO credit score. Which flavor of the score you are seeing depends on the loan product for which you are applying.
  • Your credit card statement, you are getting your FICO score.
  • A website to get a free credit score, like Credit.com, bankrate.com, creditkarma.com or credit sesame, you are going to get your VantageScore.
  • Credit bureaus, you will get your Vantage Score.
  • com, you are getting your FICO score.

Differences in Weighting Factors

The FICO score weighs dozens of factors, but each of these factors falls into one of 5 groups.  Each of the groups of factors affects your credit score approximately by these percentages:

  • Payment History: 35% of your score
  • Amount of Credit Used: 30% of your score
  • Age of Accounts: 15% of your score
  • New Credit: 10% of your score
  • Credit Mix: 10% of your score

The VantageScore was really a “from scratch” design, and as a result, it weights things differently than the FICO score:

  • 32% payment history
  • 23% credit utilization (amount of credit used/divided by credit limit)
  • 5% balances
  • 13% depth of credit
  • 10% recent credit
  • 7% available credit

Other Differences

The math and formulas for the credit scoring models is a closely held secret, so all the differences between the two cannot be definitively given.  However some things are known:

  • In the older versions of the FICO score (an older version will most likely be used to calculate your score at lenders), paid collections count negatively against your credit score. In the newer version of VantageScore, (3.0), paid collections do not count against your score.  Once lenders adopt FICO 9, you will not be dinged for having a paid collection when you and/or lenders review your credit score.
  • There are differences in how old data must be in order to register in the scoring calculation. VantageScore can score data that’s as new as only 6 months old; FICO usually requires a year’s worth of data in order to calculate a score.
  • The FICO scoring model also uses “buckets” when calculating credit scores. With a bucket, consumers with similar credit histories are put into categories with maximum scores.  Even if other credit scoring factors improve significantly, you are never going to get higher than that maximum score.

In Conclusion

FICO says that 90% of lenders use their credit scoring model and this should speak for itself.  VantageScore may see wider adaption by creditors in the future, but as of yet the score is used in relatively few lending situations.  Credit scores only matter when you are applying for loans; in addition, a credit score is only good for the instant in time it was calculated: scores change frequently.  Generally speaking, you will never see the actual credit score that the lender used to evaluate your candidacy for a specific loan product unless the lender shows it to you.  The scores you may get at free websites or even ones that you buy online are an indication of your credit health.  If you feel as though your credit score is too low or your overall credit needs a boost, it may be time to seek some professional credit repair.

Posted in Credit Score
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