VantageScore vs. FICO: Different types of credit scores

You may already be familiar with the importance of credit. After all, your credit scores can help lenders determine your creditworthiness and decide whether to approve your credit application, what interest rate to offer, how to determine your credit limit and more. 

But did you know that there are different types of credit scores? Read on to learn some credit score basics, why there are different types of credit scores, how VantageScore® and FICO® differ, and more. 

Key takeaways

• VantageScore and FICO are the credit-scoring companies most commonly used by lenders.

• Credit-scoring companies each have their own unique credit-scoring models for determining credit scores.

• Since there are multiple credit-scoring companies and multiple credit-scoring models, consumers have multiple credit scores.

• Having different credit scores is normal.

It might help to think of your credit scores as a quick summary of your credit reports. 

Your credit reports contain information about your financial habits, including things like your payment history, account balances, types of credit accounts—like credit cards and loans—and more. Credit reports are compiled by credit reporting agencies. And there are three major credit reporting agencies: Equifax®, Experian® and TransUnion®.

Credit-scoring companies—like VantageScore and FICO—use mathematical formulas, called scoring models, along with information from your credit report to calculate your credit scores.

Now you know a little bit about the relationship between credit reports and credit scores. But why do you have more than one credit score?

First, it’s important to know that it’s normal to have several different credit scores. And as long as you’re getting your score from a legitimate source, no one credit score is necessarily more valid than another. 

In addition to having multiple credit reports, there are a couple of major reasons why you have more than one credit score: multiple credit-scoring companies and multiple credit-scoring models. And those companies and models sometimes have different credit score ranges too.

Credit-scoring companies use their own credit-scoring models to calculate credit scores. And each credit-scoring company also has several different versions of its credit-scoring models.  

Each model might also use information from just one credit report or a combination of different credit reports. Then each credit-scoring model might assign different levels of importance to that information.

And that’s not all. According to the Consumer Financial Protection Bureau (CFPB), your score can even change depending on the day it was calculated or the type of credit you’re applying for. 

It’s understandable if this all feels a little complicated. 

To put it simply: There are multiple credit bureaus, credit-scoring companies and credit-scoring models. So your credit score can change depending on what information is used to calculate it, what company calculates it and when it’s calculated.

VantageScore and FICO are the most common credit-scoring companies used by lenders. 

So what’s the difference between VantageScore and FICO? And what other types of credit-scoring models are there?

VantageScore was established in 2006. It’s managed independently but was founded by Equifax, Experian and TransUnion.

VantageScore says its scoring models were the first to incorporate data from each of the three major credit bureaus. And it says that allows it to calculate scores with greater “consistency, predictability and accuracy.”

There are a few different VantageScore models, including VantageScore 3.0 and VantageScore 4.0. Each of these models uses a different formula to calculate credit scores.

VantageScore 3.0 and 4.0 scores range from 300 to 850. And a VantageScore credit score between 661 and 780 is considered a good credit score.

VantageScore also explains how different factors are generally weighted in its scoring models:

• Extremely influential: Credit utilization 

• Highly influential: Types of accounts, known as credit mix, and experience 

• Moderately influential: Payment history 

• Less influential: Credit age and new credit 

Shortened from Fair Isaac Corporation, FICO is credited with creating the first standardized scoring model back in 1989. Since then, FICO has created multiple versions of its scoring models. But it says today’s models are still very similar to the original.

According to FICO, its scores are the most widely used by lenders.

FICO credit scores generally range from 300 to 850. And FICO says scores between 670 and 739 qualify as good scores.

 

FICO scores are calculated based on five categories that each make up a percentage of your score: 

• Payment history: 35%

• Total debt: 30%

• Length of credit history: 15%  

• Credit mix: 10%

• New credit: 10% 

According to FICO, the importance of each of these categories might vary based on the version of the model or type of score. And because credit reports and scoring models can change, it can be hard to pinpoint the impact of a single factor on your FICO score. 

FICO also has industry-specific scoring models. That includes things like the FICO Auto Score, the FICO Bankcard Score and more. These scores might have different ranges and are meant to help lenders predict an applicant’s potential risk for specific types of credit.

VantageScore and FICO are two of the most commonly used credit scores. But they’re not the only ones. 

Some lenders have their own custom credit-scoring models that they use to make credit decisions, according to the CFPB. And some credit bureaus—the companies that compile credit reports—even offer their own credit scores.

Having different credit scores is normal. And small changes in your score aren’t uncommon. But if your credit score drops dramatically, there could be a reason.

Learning how to monitor your credit regularly can help you track your progress and make sure the information in your credit history is accurate.

One way to monitor your credit is by using CreditWise from Capital One. CreditWise gives you free access to your TransUnion credit report and VantageScore 3.0 credit score—without hurting your score. CreditWise is free and available to everyone—even if you don’t have a Capital One account.

You can also get free copies of your credit reports from each of the major credit bureaus by calling 877-322-8228 or visiting AnnualCreditReport.com.