Vantagescore in orange on one side and FICO on the other in blue

FICO vs. VantageScore: The Key Differences

Milad Hassibi May 7, 2018

If you have been reading into and learning more about credit scores, you probably have heard of FICO. FICO is short for Fair Isaac Corporation, a company that started the FICO scoring system in 1989. These days, FICO scores are engraved in nearly all financial decisions such as credit cards, mortgages, auto loans, and more.

However, thanks to a collaboration effort between Equifax, Experian, and TransUnion, a new market player called VantageScore has entered the arena to challenge FICO’s dominance in the marketplace. The scoring models that VantageScore and Experian use are nearly similar, but product slightly different results.

Here are some of the differences between FICO and VantageScore:

Scoring Models

Both FICO and VantageScore use the same criteria: Payment History, Length of Credit, Types ofA scale with vantagescore on one end and fico on the other Credit, Credit Usage, and Recent Inquiries. Although both companies consider the same information, the data is gathered differently.

FICO creates their scoring model by obtaining millions of anonymous credit reports from the 3 major credit bureaus. FICO then goes and analyzes the reports to generate their scoring model.

VantageScore, on the other hand, uses consumer credit files from the 3 major bureaus to come up with their scoring formula. Both FICO and VantageScore keep their formula secret, but the factors that affect your score are well known.

Late Payments

Late payments will lower your credit, and a history of continuous late payments could have a deep impact on both your FICO score and your VantageScore. FICO treats all late payments the same, while VantageScore will place more weight on larger payments such as mortgages.

Your credit score will be lowered more by VantageScore if you miss a mortgage payment than missing a mortgage payment under FICO.

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Credit Inquiries

Its common knowledge that opening multiple credit cards and inquiring about multiple loans in a short period of time is bad for your credit score. Every time you apply for a line of credit from a bank, credit union, or another lender, they perform a “hard credit check”.

However, in some cases, such as with an auto loan, your application may be sent to multiple lenders in a short period of time. This is where deduplication comes in. For FICO, if you inquire about multiple auto loans within a 45 day period, it will only count as 1 inquiry. VantageScore limits that time frame to only 14 days.

Final Note

All in all, most consumers won’t see too much a variance between their FICO score and VantageScore credit scores. Currently, both scoring models base their scores from 300-850 to make it easier for consumers.

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