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VantageScore vs FICO Score: What’s the difference?

December 5, 2023

Lenders have two primary options to look at when evaluating your credit because everything comes down to a score. Most creditors will use your FICO score to decide whether you are creditworthy. People usually think of their FICO score when they think of a credit report. The company was the first in the field, but a growing number of lenders are now using VantageScore. Here are the differences between the two and how they impact you.

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What's the Difference Between FICO and VantageScore?

Knowing your credit score is an important part of maintaining your financial wellness and a necessary part of using installment loans to build credit. But, it can be confusing to know the difference between scores. 

There are two main kinds of credit scores: FICO and VantageScore. They both are a measure of your creditworthiness (how likely you are to repay a loan) and use the same credit range of 300 to 850. The higher your credit score, the better your creditworthiness is. 

What are the main differences between FICO and VantageScore? 

 VantageScore FICO
What is it?  Founded by three major credit bureaus in 2006, run as an LLC Founded in 1956, run as a public company
Scoring Criteria  No minimum amount of credit history length required. There is one account (tradeline) required.  Requires six months of history for one account (tradeline). 
Score Range 300-850 300-850
Weighting  Uses a "level of influence" descriptor for five categories.  Five main categories have clear percentage allocations. 
Hard inquiries treatment If within 14-day period, multiple inquiries are treated as a single inquiry. If within 45-day period, multiple inquiries are treated as a single inquiry.

Similar Credit Scoring Criteria but Different Ways to Get There

Let’s start with the common elements between these two types of credit scores. Both are measuring your creditworthiness and the possibility that you might default on a loan within the next two years. In general, they are both looking at the same types of criteria to compute your score. However, they use different ways to get there.

The Two Models Use Different Weights

One of the major differences between FICO and VantageScore is the weight that each gives to the different elements of your credit score. For example, VantageScore weighs payment history and age of credit more heavily than FICO, although a more recent model of VantageScore cuts the importance of payment history. On the other hand, FICO’s weightings count the amount of credit that you have outstanding much more heavily. In addition, FICO also counts new credit and credit inquiries much more than VantageScore.

In the end, the two models may reach roughly the same scores and conclusions based on the individual factors, albeit with minor differences. It is doubtful that you would qualify for credit based on FICO but not based on VantageScore or vice versa. They largely would reach the same conclusions about you as a possible borrower.

Duration of Credit History

The FICO model clearly favors borrowers with longer credit histories. Some consumers may not even be able to receive a FICO score. The requirements are that you need to have at least one credit account that was open for at least six months and one account that reported information to the three credit bureaus within the last six months. If you do not have those, FICO cannot assign you a score.

VantageScore allows more people to receive credit scores. All you need to have is one account for one month and one account reporting data within the past two years to receive a score. If you are trying to build credit being new to everything, FICO will make it harder for you to get started. Every borrower needs to start somewhere.

Credit Inquiries

The two services treat credit inquiries differently. For both, a hard inquiry on your credit will affect your score because it is a sign that you are considering adding to your debt level. When you are shopping around for a loan, you may compare different products, but lenders may not quote you an exact rate unless they know your credit history. Thus, multiple lenders may make inquiries.

FICO gives you more time to shop around. If you have multiple inquiries of the same type within a 45-day period, they only count as one credit pull. VantageScore only gives you 14 days to shop around for credit. If the inquiries are more than two weeks apart, each will count against you.

Credit Snapshots Versus History

The FICO report looks primarily at data that is reported to credit bureaus at the time that the score is calculated. This allows for borrowers to get more credit with more recent favorable trends in their score, but it also means they could be punished for unfavorable trends.

VantageScore will reflect patterns, but they will be over a broader period of time. VantageScore analyzes data and trends over 24 months as opposed to just the more recently reported data. VantageScore may make it harder for consumers to recover more quickly from a bad credit history or a missed payment in the past.

Whether Small Collections Harm Your Credit

Many consumers have small accounts referred to collections. Some creditors will send an account to collections even over unpaid bills as low as $10–20. FICO is much more forgiving when it comes to these small outstanding accounts. FICO will ignore derogatory information of the account if the outstanding amount is below $100.

VantageScore looks at everything. Even very small amounts will work against you. Given that VantageScore considers trends over two years of time, even a small unpaid bill in your past can have an impact on your credit score.

On the other hand, VantageScore is a little more charitable when it comes to paid collection accounts. It will ignore these accounts after they have been paid. FICO may or may not ignore these accounts. It depends on the particular FICO version that creditors are using. Many consumers would consider it harsh that an unpaid account for a little amount of money could work against them.

In terms of what this all means for you, keep doing what you are doing when it comes to building up your credit history and score. If you adopt healthy habits and try to cut your debt levels while establishing payment history, you should be viewed as creditworthy no matter what scoring model a creditor uses to judge you. Consumers do not have control over which model a creditor uses, but they do have control over their own borrowing habits.

You can check both your credit scores from TransUnion and VantageScore with our Pocket360 online account management tool. Consider signing up today with P360 for a more streamlined approach to loan management.

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FAQs: VantageScore vs. FICO  

Are VantageScores higher than FICO? 

While initially VantageScore credit scores ranged from 501 to 990, the company has since switched to the 300 to 850 score that FICO uses. In both models, the higher the score the better, especially when trying to work on your credit building for installment loans.

Lenders are more likely to give creditors with higher scores financing.  Borrowers with higher scores are also more likely to get multiple lender offers to choose from. Having high credit scores saves you thousands of dollars in the long run. 

Why is VantageScore so different from FICO?

VantageScore is the result of the union of the three major credit bureaus (Experian, TransUnion, and Equifax). FICO is its own independent company. While both VantageScore and FICO now share the same credit score range, there are some other differences. 

For example, lenders may not interpret the scores the same. FICO requires creditors to have at least one account (or tradeline) open and active for at least six months to get a credit score. VantageScore also needs one account open but requires no minimum credit history length. 

FICO also weighs more heavily on payment history and VantageScore weighs more heavily on total credit usage and balances. For hard inquires, VantageScore will count all of them as one within a 14-day window, while FICO's window is 45 days. 

Do lenders look at FICO or Vantage?

While up to 90% of lenders use the FICO score when checking your credit score, you shouldn't assume that's the one your lender will look at. The best course of action is to ask them what score they'll be checking and to keep track of your credit scores with both companies, getting them as high as you can. Keeping your credit scores up helps in all lending circumstances, including installment loans to build credit. 

Why is my Vantage 3.0 score lower than my FICO score?

VantageScore Solutions and FICO have differing credit-scoring models and do not treat all credit data the same. This may result in scoring differences. Both however do use the same range for scoring, 300 to 850.

How do I convert VantageScore to FICO score?

Since the scoring models are different and use different criteria, there is no official method to convert a Fico score to VantageScore, and vice versa. It is helpful to consider both of these scores for a more comprehensive view of your credit score.

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