FICO vs. VantageScore: What's the Difference?

FICO vs. VantageScore

By Taylor Milam

You probably know your credit score, but you may or may not know the details of credit score calculation or the scoring model. In fact, according to a recent survey, 4 in 10 Americans have no idea what factors determine their credit score.

But even though it’s important to understand the factors that determine your score, that’s only one piece of the puzzle. There are actually different types of credit scores that come from different scoring models.

Have you ever noticed that your score is slightly different depending on when and where you check it? Even though it’s normal to see slightly different numbers when you check your score, part of the reason for the discrepancy in numbers is due to different credit scoring models.

Here’s what you need to know about scoring models and the ways they can affect your score.

What is a scoring model?

Credit scoring is a mathematical process that lenders and other businesses use to decide credit eligibility and loan terms. The factors used in the process can include payment history, amount and type of accounts you have, timeliness, outstanding debts and more.

After they collect the information, creditors input the information into an automated system that creates an individual score. But here’s where it gets interesting — not all scoring systems are exactly the same. Creditors and other companies can create their own scoring models based on risk.

Different companies have different models

The Federal Trade Commission clearly states that every company can use a unique scoring model. In addition, companies can use different scoring models for different types of credit or loans. And lastly, companies may also use a generic model developed by a scoring company. In other words, companies have the choice to create their own scoring model or use a scoring model created by a third-party like FICO or VantageScore.

But even though credit scoring models can change from one company to the next, they all must adhere to similar standards. According to the Federal Trade Commission, all credit scoring models must adhere to the guidelines from the Equal Credit Opportunity Act (ECOA):

“Under the ECOA, a creditor’s scoring system may not use certain characteristics — for example, race, sex, marital status, national origin, or religion — as factors. The law allows creditors to use age, but any credit scoring system that includes age must give equal treatment to applicants who are elderly.”

Why companies use scoring models

Lenders use credit scoring models because they are a simple and fair way to determine how risky it is to lend to a potential customer. Lenders want to reduce risk because lower risk means that the customer is more likely to repay the loan. For lenders, credit scoring models are an important part of doing business.

Barry Paperno, credit expert and writer, explains why scoring models are important for lenders.

“Credit scores enable lenders to make automated credit decisions that are objective, faster, and more consistent and accurate than decisions made subjectively without credit scores.”

FICO vs. VantageScore

Fico score vs. VantageScore - what's the difference?

Whether or not you know what it stands for, you’ve probably heard of “FICO” before, and there’s a good reason for that. Until VantageScore entered the credit scoring marketplace about ten years ago, FICO was the primary credit scoring company in the United States. Founded by Bill Fair and Earl Isaac in 1956, the Fair Isaac Corporation was the first credit scoring company.

Today, lenders use both credit scoring models for lending decisions. Even though FICO and VantageScore aren’t the only scoring models, they are the most popular. Because of that, it’s important to understand the differences.

What you need to know about VantageScore

VantageScore uses a credit scoring model developed by the company. In earlier VantageScore versions, the credit scores ranged from 501 to 990. However, the VantageScore 3.0 model updated the score ranges so they more closely resemble other credit scoring models. Today, the credit scores range from 300 to 850.

Factors that impact your VantageScore

According to VantageScore, different factors impact your VantageScore credit score and some factors are more important than others. Here are the factors that influence your credit score, ranked in order of importance by VantageScore:

  • Total credit usage, balance and available credit: This is the most important factor for VantageScore and it essentially looks at the total amount of credit you’re able to use, the total amount you’re actually using and how much is leftover.
  • Total credit mix and experience: This is about the type of credit you have — credit cards, car loans, mortgage — and how long you’ve had the accounts.
  • Payment history: This factor focuses on whether you pay your bills on time.
  • Age of credit history: Although this is second to last, the length of your credit history is still important.
  • New accounts: This factor is about how many new accounts you have, how recently you opened them and how many hard credit inquiries are on your report.

In reality, both scoring models are similar and use the same information. For example, both penalize you for late payments or missed payments. But even beyond that, you can get access to credit scores from both companies through the three major credit bureaus: Equifax, TransUnion and Experian.

“Most FICO and VantageScore models are offered by all three bureaus. FICO score models are custom-developed for each of the three credit bureaus. With VantageScore, a single model is developed and applied at each bureau,” says Paperno.

The main difference

The main factor that distinguishes VantageScore from FICO is how long you have to build credit before you have a credit score.

Paperno explains that FICO requires at least one account opened more than six months ago, while VantageScore requires only one month of history.

This is significant because it means that more customers are able to receive a score and as a result, those consumers are able to get access to credit. In fact, according to VantageScore, millions of additional consumers have been able to receive a score as a result of their scoring model:

“The VantageScore 3.0 model, which is the most recently introduced model, provides a score to 30–35 million adult consumers who otherwise would be virtually invisible to mainstream lenders. So when lenders use the VantageScore model, they can provide credit to more consumers at the most appropriate terms.”

How to check your VantageScore

Thanks to innovations in technology, it’s easier than ever to check your VantageScore for free. In fact, if you check your credit score through a popular bank like CapitalOne, you’ve seen your VantageScore. If you’re interested in checking your score, VantageScore has a complete list of free credit score providers.

What you need to know about FICO

What to know about your FICO credit score

Like VantageScore, FICO is a company that provides credit scores that range from 300 to 850. In other words, a FICO score is a particular brand of credit score. Historically, FICO scores have been the gold-standard for credit scores and according to Paperno, that’s still true today:

“FICO claims their scores are used in more than 90% of credit card, auto, mortgage and other credit decisions. VantageScore, the newer product, does not appear to have been adopted by many lenders for their lending decisions.”

The Consumer Financial Protection Bureau echoes Paperno and explains:

“Today, other companies also have credit scoring formulas (‘models’), but most lenders still use FICO scores when deciding whether to offer you a loan or credit card, and in setting the rate and terms.”

Factors that impact your FICO score

Even though the factors that impact your FICO and VantageScore are the same, the order of importance is slightly different.

Here are the factors that impact your FICO score ranked in order of importance.

  1. Payment history: This factor looks at whether you pay your bills on time.
  2. Amounts owed: For this, the FICO model looks at how much you owe on your various accounts in relation to how much credit you have available.
  3. Length of credit history: This is about how long you’ve had credit or loan accounts.
  4. Credit mix: This factor is about the types of credit you have — installment accounts, mortgage loans, auto loans and more.
  5. New accounts: For this, FICO looks at how recently you’ve opened new accounts and during what time frame.

Something that’s interesting to note is that everyone actually has three different FICO scores, one from each credit bureau. This is because FICO score models are custom-developed for each credit bureau.

According to Paperno, lenders choose which score they use to make a lending decision based on their own past experience. Lenders tend to use the scores that have been most reliable in predicting future risk.

How to check your FICO score

Checking your FICO score is a little complicated because the scores online are often different from the scores that lenders use. This is partly because FICO scores change regularly, and they’re not free to get.

According to FICO, it’s best to find out exactly what score a lender is using so you know which score you need to buy from FICO:

“If you're planning on making a major purchase, you probably want to check your FICO Score and not just any credit score. If you really want to be sure that you are seeing the same information that your lender is judging you by, then ask the lender which score they are using and then purchase that exact score, or set of scores.”

Bottom line

The truth about FICO and VantageScore is that they are very similar.

“Since most credit scoring models essentially do the same thing — predict risk — lenders tend to use the models and credit bureaus that over time have proven to be most reliable in their experience,” Paperno explains.

This is good news for your credit because if you work to improve your credit score or build credit for one model, you’ll probably improve your credit for the other model as well.

About the author

Taylor Milam is a personal finance writer who has also written for Credit Karma, Chime, Acorns and Policy Genius, among others.

Written on July 9, 2019

Self is a venture-backed startup that helps people build credit and savings.
Comments? Questions? Send us a note at

Disclaimer: Self is not providing financial advice. The content presented does not reflect the view of the Issuing Banks and is presented for general education and informational purposes only. Please consult with a qualified professional for financial advice.

Ready to join Self?