VantageScore vs. FICO

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VantageScore vs. FICO

VantageScore vs. FICOYou probably know that you have multiple credit scores, figured using different versions of different credit scoring algorithms. When many of us think of credit scores, we think of those based on the FICO formula. A number of lenders and others in the financial services industry use FICO to make decisions about how responsible you are likely to be with credit.

Over the last few years, though, VantageScore has been gaining ground as a credit scoring model. Some see FICO as too opaque and too outdated to accurately reflect the changing habits of consumers in the 21st century. VantageScore aims to offer a scoring model that takes into account more information and hopes to improve accuracy as it relates to gauging a consumer’s ability to handle credit.

Jeff Richardson, a representative from VantageScore Solutions, says that nearly one billion VantageScore credit scores were used in 2014 by more than 2,000 lenders and others in the industry — including six of the 10 largest banks. “This represents a 24 percent increase in the number of users of the VantageScore models and a nearly 600 percent increase in the number of scores used as compared with 2013,” he says. 

So, why is VantageScore gaining in popularity? Part of it has to do with VantageScore’s ability to score more people, and the consistency of the ratings across credit reporting companies, says Richardson. It has wider application and an increasingly wider appeal.

Scoring more consumers

“The VantageScore model can generate a score for 98 percent of consumers with credit files at the three national credit reporting companies,” says Richardson.

How many times have we heard stories about “thin files” that don’t have enough credit information in them for FICO to generate a score? Richardson says that VantageScore’s model values tradeline data as recent as six months old. In fact, Richardson says, “Consumers whose oldest tradeline is less than six months old can be scored after the first tradeline update.”

In a world where no score can be worse than a poor score, VantageScore might be able to provide a little more insight into consumers, even if their credit files are relatively thin.

Consistency in scoring

FICO has a number of different versions of its model available for different uses. Each credit reporting company can use a slightly different version of FICO for scoring, and individual lenders can also use modified versions. FICO also sells versions that are adapted for specific purposes, like car loans or mortgages. This can make it confusing for consumers who aren’t sure which version of FICO is being used.

Richardson says that the same VantageScore model is deployed at all three of the major credit reporting companies. “Use of a common model across the three credit reporting companies improves a lender’s ability to manage risk and a consumer’s understanding of the credit scoring process,” he points out. 

VantageScore recently overhauled its model to be more consistent with what consumers are used to, but even with the overhaul, VantageScore remains fairly consistent. “VantageScore 3.0 uses a scale of 300 – 850, which more consumers are used to,” says Richardson. 

Transparency in scoring 

As part of the launch of VantageScore 3.0, a website called was released. When you receive your score, you might see “reason codes” listed nearby. These are numbers that indicate certain items in your credit file that contribute to your score, such as late payments, high credit utilization, or other factors. The idea behind ReasonCode is to translate these numbers into plain English so that consumers can better understand their scores.

“The site allows consumers to search specific reason codes generated from any VantageScore model and receive deeper explanations,” says Richardson. “Consumers also receive specific tips for addressing the credit behaviors that resulted in the reason codes the received.”

Use your VantageScore to improve your finances

Thanks to the transparency in scoring, it’s possible for consumers to look at their VantageScores and determine how to best improve their finances. “Pay attention to your score on a regular basis using resources like,” suggests Richardson. 

However, he says that your credit score should just be the starting point with your finances. “The score is a representation of the contents of your credit file, so check your files regularly to ensure accuracy.” By digging into your score and your credit, you can identify problem areas in your finances. You can also use your score as a benchmark by which to track your progress. As your financial situation improves, you can monitor it by your score. When you see an unexpected drop in your score, that can be an indication that you need to make a change in your financial habits. 

Richardson points out that there are plenty of resources you can use to learn more about your VantageScore and your finances. “Quizzle offers consumers deep explanations for reason codes and tips for improving your score,” he says. “It’s basically a customized roadmap for credit score improvement.”

Sign up for your free Quizzle account and get your free credit report and score.

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Miranda is a freelance writer and professional blogger specializing in financial topics. Her work has appeared in numerous media, online and offline. Her blog is Planting Money Seeds.