What's the difference between a FICO score and a VantageScore?

FICO scores and VantageScores are both credit scoring models used to assess an individual's creditworthiness, but there are some key differences between them:

1. Development and Ownership:

   • FICO Score: Developed by the Fair Isaac Corporation (FICO), the FICO Score is one of the oldest and most widely used credit scoring models. FICO is a separate company that licenses its scoring model to the three major credit bureaus (Equifax, Experian, and TransUnion) and other lenders.
   • VantageScore: VantageScore Solutions is a company formed by the three major credit bureaus (Equifax, Experian, and TransUnion) to create a competitor to the FICO Score. VantageScore models are developed jointly by these credit bureaus.

2. Scoring Range:

   • FICO Score: The FICO Score typically ranges from 300 to 850, with higher scores indicating better creditworthiness.
   • VantageScore: VantageScore models have different versions with varying score ranges. The VantageScore 3.0 and 4.0 models have a range of 300 to 850, similar to the FICO Score. However, VantageScore 2.0 has a range of 501 to 990, and VantageScore 5.0 has a range of 300 to 850.

3. Weighting Factors:

   • FICO Score: FICO uses a specific formula to weigh various factors in your credit report. The factors include payment history, credit utilization, length of credit history, types of credit, and recent credit inquiries.
   • VantageScore: VantageScore models also consider similar factors, but the weighting of these factors may vary slightly from one version to another. VantageScore 4.0, for example, gives more weight to recent payment history than older models.

4. Use by Lenders:

   • FICO Score: FICO scores are widely used by lenders, including mortgage lenders, credit card issuers, and auto lenders. FICO scores are known for their extensive use in the lending industry.
   • VantageScore: VantageScore models are used by some lenders, but they are generally considered less prevalent in the lending industry compared to FICO scores.

5. Version Differences:

   • Both FICO and VantageScore periodically update their scoring models to better reflect consumers' credit behavior. As a result, there are different versions of each model. Lenders may use various versions of these models for different types of loans.

6. Scoring Consistency:

   • Different versions of FICO scores are generally consistent with each other. If you have a good FICO Score from one version, you're likely to have a good score from another version.
   • VantageScore models can have more significant variations between versions. Your score may differ more significantly if you compare scores from different VantageScore versions.

7. Credit Education Scores:

   • VantageScore Solutions offers "VantageScore Credit Education Scores," which are designed to provide consumers with a better understanding of their credit. These scores may differ from the scores that lenders use.

It's important to note that while FICO and VantageScore are the two most prominent credit scoring models, there are other credit scoring models as well. When applying for credit, lenders may use a specific version of a scoring model tailored to their industry or preferences. Therefore, your credit score can vary depending on which model and version a lender uses to assess your creditworthiness.