Differences Between the VantageScore and the FICO Score


The FICO scoring system has dominated the credit scoring industry in the U.S. since its inception in 1989. But that changed in 2006 when a new scoring system was established – the VantageScore. There are a lot of credit scoring systems out there, but these two are currently the most prominent ones. So, what are the differences between the FICO score and the VantageScore?

They have been created by different institutions

The Fair Isaac Corporation created the FICO credit scoring system in 1989. Meanwhile, three major credit reporting agencies, namely Equifax, Experian, and TransUnion, created the VantageScore in 2006.

Essentially, they both give credit scores, so you can shop around for auto loans, mortgages, rents, and whatever else. But because these scoring systems have been created by different institutions, they calculate credit scores differently.

They have different credit score calculations

The FICO and VantageScore scoring systems determine your creditworthiness using certain factors, such as the following:

  • Credit utilization. This is the ratio of your outstanding credit balance to your credit limit. In other words, it shows the amount of credit you are using in your limit.
  • Length of credit history. How long have your accounts been open? How long has it been since you have used these accounts? If you have bought authorized user tradelines, the original user’s credit history will also reflect on the report.
  • Payment history. Both systems consider your payment behaviors on all your credit accounts, including authorized user tradelines.
  • Types of credit. Do you have installment, open, or revolving credits? Are you using a mix of these types of credit? Your credit mix is not a big factor in calculating your credit score, but both systems do consider them.

Many people buy authorized user tradelines to have better credit profiles. After all, the original user’s profile reflects on the user’s profile too. So, there is a chance that FICO and VantageScore will give them a higher score if the original user has a good profile.

Sure, both FICO and VantageScore consider the same factors, but they treat all the information they have gathered differently. They are particularly different when it comes to credit inquiries and late payments.

They treat credit inquiries and late payments differently

Credit inquiries

Both FICO and VantageScore penalize people who have numerous credit inquiries. So, you should be careful about making numerous inquiries in a short period. The difference between the two scoring systems is the span of the period. During this span, all your inquiries will be considered as only one hard inquiry.

For FICO, you can have one hard inquiry within 45 days. But for VantageScore, the period is only 14 days.

Late payments

Both FICO and VantageScore penalize late payments in your profile. They ask the following questions:

  • How many of the accounts have late payments?
  • How many late payments are there on each account?
  • How recent is the last late payment?

The difference between the two scoring systems is that FICO treats all late payments equally. VantageScore, on the other hand, is stricter when it comes to late mortgage payments.

They have different credit score ratings

The FICO scoring system and the latest versions of VantageScore now have the same score range of 300 to 850. But this wasn’t always the case. The earlier versions of VantageScore had a range of 501 to 990.

However, this doesn’t mean that the two scoring systems have the same ratings. What is considered a good score range on one isn’t necessarily good on the other. But generally speaking, a FICO score of at least 670 and a VantageScore of at least 700 are considered good scores.