Understanding the Difference Between VantageScore and Fico Scores

At first glance, you may think they’re the same thing – complex software algorithms that crunch credit reports and spit out a credit score based on that data. Digging deeper, we even see that the scoring models known as VantageScore and FICO have similar goals: to gauge the risk of a consumer falling behind at least 90 days on one of their bills or debts in the next two years.

Additionally, VantageScore and FICO credit scoring models are considered universal, which means they’re created for a general view of scoring that’s useful for a host of creditors, from credit card companies to auto lenders to student loan servicers, and more.

But we start to see VantageScore and FICO diverge, as FICO also releases industry-specific scoring models, like those for auto lending or scores for bank cards. Those versions are made specifically for lending within those industries.

Both VantageScore and FICO update their scoring algorithms and models periodically, making subtle changes to keep them as accurate as possible when it comes to predicting consumer behavior, reflecting new trends, industry changes, and even technology.

With a host of options, creditors and lenders can pick and choose which industry-specific scoring model they want to use based on their risk parameters.
Another major difference is how long these models have been established. In fact, the first VantageScore model (version 1.0) kicked off in 2006, and the latest version (4.0) was released in 2017. FICO, however, released their first scoring model way back in 1989, and the latest version is FICO Score 9, which was rolled out in 2014.

The end result is that your VantageScore may offer a different credit score than your FICO score, even while using the exact same data from the same credit reports.

How can they possibly give different scores for the same person?

The reason is that FICO and VantageScore models assign different levels of importance to different factors in a consumer’s credit report and credit history.

Here are some more differences between FICO and Vantage scoring:

Vantage Score offers a single model that encapsulates data from the three major credit bureaus, Experian, Equifax, and Transunion.
FICO’s latest version, FICO 9, however, offers models that are specific to each of the credit bureaus. So, although they may all be FICO 9, there will be three separate versions according to each of the credit agencies.

Differences with minimum scoring requirements

FICO only reviews your credit report and creates a score once you have a tradeline for at least six months. You also need activity on a tradeline within the last six months, although it doesn’t need to be the same tradeline.

But VantageScore may assign you a credit score if your credit report has at least one tradeline or account, but they don’t need to be at least six months old.

Score ranges for VantageScore and FICO

Remember that with any scoring model, consumers will receive a higher score if they are less likely to miss payments based on predictions, and that’s why banks, lenders, and companies are willing to offer them new credit with better rates and terms.

FICO Scores go from a low of 300 all the way to a perfect score of 850. But FICO’s industry-specific scores have a wider range, with 250 being the bottom and 900 the top score.

VantageScore’s first two versions followed a range of 501 to 990, but the two most current VantageScore models (3.0 and 4.0) run from 300 to 850, the same range as FICO Scores.

Even if the scores run the same range, what’s considered a good or great credit score may vary slightly between VantageScore and FICO Scores.
We’ll bring you more information on the difference between VantageScore and FICO Scores.

But the good news is that the basics of responsible credit management are the same no matter which scoring model we’re looking at, so you don’t necessarily need to know every specific rule and parameter for Vantage or FICO. Instead, just focus on paying your bills on time, keeping your debt level low, and having a good mix of credit, including well-seasoned accounts.

Contact us if you have any questions or would like to see how to improve your VantageScore or FICO Score!