VantageScore vs FICO Score: Here’s The Truth In 2014

Posted by CreditCardGuru

The Vantage credit score is a world apart from the FICO score. Make sure you know their similarities – and most important of all – their differences.

What is VantageScore?

Before there was VantageScore, there was FICO. Let’s talk about that first…

  • In 1958 Fair Isaac Corp. created the first credit score model.
  • In ’81 they created the first scoring models for credit agencies.
  • In ’89 they launched the first FICO score for general-purpose.
  • In a nutshell, FICO was first. It has been (and still is) the industry leader for credit scoring. It’s usually what lenders look at when they consider your credit application.

The Big 3 credit reporting agencies – Experian, Equifax and TransUnion – have to pay Fair Isaac to license their proprietary FICO scoring algorithm. So the three of them banded together to create the Vantage credit score for their own use to save money. However FICO was and still is the gold standard for lending/credit decisions – purportedly with a near 90 percent marketshare.

But rather than pay $19.95 every single time you check it (which is what MyFICO charges) you can actually get regular free access to your FICO score with this new card:If you have excellent credit, then consider this other card of theirs:
The three credit agencies hope their own credit score model, the VantageScore, will become a viable competitor.

  • In March of 2006 the first version was launched. The VantageScore range at the time was 501 to 990 (versus FICO’s 300 to 850).
  • In October 2010 the second version – 2.0 – was launched. It still ran on the same score range, but claimed to offer “improved predictive performance.”
  • In 2013, the score switched to a 300-to-850 range with its 3.0 model to more closely follow FICO.

Who uses VantageScore?

This score hasn’t even been around a decade yet and thus far, lenders have failed to adapt it on a wide scale. To put things in perspective, according to FICO’s website, their scoring models are used by more than 90 percent of the largest lenders. So who is actually using VantageScore? That’s hard to answer!

In 2006 Fair Isaac Corp. filed suit against VantageScore Solutions, LLC alleging that they were trying to drive Fair Isaac out of the credit scoring industry. Within the 52-page court order, it’s claimed that VantageScore’s marketshare was only 5.7 percent.

In the years since usage has gone up, but by how much is anyone’s guess. According to VantageScore’s website, the score is used by

  • 7 of the Top 10 major financial institutions
  • 8 of the Top 10 credit card issuers
  • 6 of the Top 10 auto lenders
  • 5 of the Top 5 mortgage lenders

The question is, though, how often are 7 of the Top 10 major financial institutions using VantageScore vs. FICO? I believe that would give us a clearer picture as to who uses Vantage credit scores.

VantageScore vs. FICO score?

Here’s are a couple things to consider when comparing these scores:

Components

The formulas for both FICO and VantageScore are secret, so no one can tell you exactly how they are calculated. However both companies do provide some basic information as to the general categories and how they affect your score. Here’s FICO’s breakdown:

FICO components pie chart

VantageScore, meanwhile, doesn’t have an exact breakdown, but provides this approximation:

Extremely influential factors:
-Payment history

Highly influential factors:
-Age and type of credit
-Percentage of credit limit used

Moderately influential factors:
-Total balances/debt

Less influential factors:
-Recent behavior and inquiries
-Available credit

For a more detailed explanation of this, check out my post about highest credit scores.

Conversion

So how do you convert between the two?

Well as mentioned above, even though they’re quite similar, they don’t weigh things the same. For example, VantageScore seems to lump age of account history and credit mix into one “highly influential” category, while FICO divides them up into two less influential categories.

Therefore since these are two different algorithms, a VantageScore vs FICO score conversion is not possible!

Back when the VantageScore used its old 501-990 scale, some people recommended converting between them like so: multiply Vantage by 0.86 (since FICO’s top score of 850 was just about 86% of 990). Or to convert from FICO to Vantage, you multiply by 1.16 (which is 990 divided by 850). Yes, that might have given you a ballpark approximation, but more often than not, these formulas seemed to yield unreliable results.

Bottom line: Even though the score ranges are now the same, you can’t draw neat comparisons. We are talking about different models, each weighing the scoring components in a different manner.

How important (or not) is your VantageScore to you?

Admittedly, I am pretty tough on criticizing the VantageScore, but the main reason for that is because it’s not widely used yet by lenders.

You can, however, get it for free on Credit Karma, and it can be a useful way to track your credit-building process over time and see how certain actions affect your credit.


Updated April 21, 2014


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19 comments... read them below or add your own

  1. Mad Guy May 26, 2014 at 2:01AM

    Why the hell do I have to pay for MY credit score? Why the hell is the formula to MY credit score a secret? Why the hell are we paying for them to keep tabs on us for other people? And so many more “why the hells?”.

  2. NOTHING NEW March 28, 2014 at 1:26PM

    This is ridiculous!
    what’s the point of having two of we still consistently use one for major purchases such as house, or cars?

  3. Mikey March 2, 2014 at 12:09PM

    This is the fourth site where I have seen the comparison between FICO and Vantage. I wondered about the statement that FICO uses amount owed and Vantage uses utilization.

    I worked at FICO for a number of years and unless things have changed utilization is essentially the same thing as amounts owed .

    This is directly from the FICO site (my caps):
    “How much of the total credit line is being used and other “revolving” credit accounts
    Someone who is close to “maxing out” several credit cards has a high credit UTILIZATION ratio and may have trouble making payments in the future”

    Vantage lists three categories that all fall under the class of utilization and amount owed:utilization, balances, available credit.

    All three of these can make up various measures of utilization, so they really are redundant and, if the %’s are accurate, Vantage really is heavily weighted towards some measure of “utilization” at 23% + 15% + 7% = 45%.

    Seems a bit unbalanced to me.

    • Victoria July 23, 2014 at 1:14PM

      Utilization does not equal amounts owed. If you have a credit card with a limit of $1000 and you’re only using $100 that’s 10% utilization. If you have a credit card with a limit of $100 and you’re using the $100 that’s 100% utilization. That’s a huge difference. It’s about not maxing out your credit cards. If you max stuff out then you either A)aren’t paying enough, B)can’t control your spending, C)feel the need to open other accounts which creates more debt.

  4. equaltemp October 19, 2013 at 8:29PM

    I would assume lenders would want to use credit scoring companies that provide the most accurate scores, in terms of a consumer’s credit worthiness. If lenders believe the VantageScore to more accurate that Fico, then it makes perfect sense for them to use the Vantage score.

    The fact that the 3 major CRA’s are the creators of the VantageScore could be nightmare for some consumers. The CRA’s know first hand about people trying to dispute accurate negative accounts, as well as negative accounts that are accurate but being deleted because of “pay for delete” negotiations, which is something the CRA’s don’t like. They are aware of all the loop-holes that consumers try to take advantage of.

    You can be sure that this is only one of a number of factors that they have taken into account to determine your VantageScore.

    THE CHICKENS ARE COMING HOME TO ROOST!

  5. EDL July 19, 2013 at 5:42PM

    It is infuriating. I worked so hard to bring up my credit score to what is considered a good credit score, but according to the Vantage score, it’s not good. Not only that, but now there are auto insurance scores and homeowners insurance scores. This has to stop.

    What does the future hold? Fifteen different scores for everything they can think of?

    I don’t understand how I can even gauge my credit score now. I should qualify for a home loan under the FICO but not the Vantage. How can I even have the confidence to apply for a home loan if I can’t even gauge which score they will use? It’s not fair to people who are trying to rebuild their credit.

    It’s all about saving money? It figures. Why on earth would we expect them to be fair?

  6. JT April 29, 2013 at 6:18PM

    Don’t bother buying a Vantage score, it’s just a get-rich-quicker scheme… a market in itself.

  7. Landry December 9, 2012 at 11:27PM

    My FICO Score is 750, but vantage score is only 767. Just for your reference. I think i got too much type of credit and that is the reason.

    • DMC June 30, 2014 at 6:17PM

      My FICO is 780 and my on time payments is 100%. Vantage has found a way to down grade my score to a 737 which = a C in their book. On Karma Credit.com my score is made up of the three reporting agencies. Why in the world should we have a Vantage score? The advantage goes to the creditors – who, given the choice of a FICO over Vantage score will likely go with which score can justify charging a higher rate of interest to the consumer. The “house” always wins.

  8. Tricia October 14, 2012 at 8:36AM

    The trouble with paying for your FICO is that it isn’t the one they sell to the banks when you’re applying for a loan. i.e. you check your score before applying for a mortgage, think it’s okay, only to find out the score they gave the bank was significantly lower.

    • nick June 19, 2013 at 10:02AM

      How do you know that and is there a way to attain the actual score?

    • khani March 21, 2014 at 2:59PM

      I discovered this to be true when I applied for a mortgage loan. I paid to see my actual credit score so I would know where I stand–which was pretty good. But when I talked to the lender, they have a different score than what I had. We both have confirmed that we are looking at the supposedly same score. It was very frustrating since it meant I got a higher mortgage rate based on the credit score the lender got.

  9. Carole October 2, 2012 at 11:02AM

    Regarding VantageScore… Experian and TransUnion are using it but not Equifax. I discovered today, after much time on the phone, that Experian excludes my credit cards that are identified to them as flexible spending accounts. These are in fact VISA and MC credit cards issued by Chase Bank but they have a flexible limit. Experian excludes them from the VantageScore. However, TransUnion does in fact include them in the VantageScore. So, even though my credit reports by these two companies are identical for reported information they differ in the resulting VantageScore by 164 points !!! One would expect if using the same model that the same inclusion rules would apply.

    • John November 28, 2012 at 1:59PM

      True Statement.

  10. JC September 5, 2012 at 9:34PM

    The proposed formula for converting Vantagescore to FICO (V * 0.86 = F) is inherently flawed. Let’s forget the fact that the two systems use different elements of your credit report and assign different weights to them to come up with a score. Even if that part of the methodology were the same, the two systems not only have a different maximum score but a different range of scores as well. With Vantage the range is 501-990, a 489 point spread. With FICO it’s 300 to 850, a 550 point spread. That’s a 61 point difference, which means that a single point in Vantage has a value of around 112.5% of that of a single point in FICO (550 / 489 = 1.1247 or 112.5%).

    To convert from Vantage to FICO we should first subtract the minimum Vantagescore of 501 to determine where in the 489 point range the score falls, multiply that result by the Vantage-to-FICO point ratio to see where the score falls in the 550 point FICO range, and finally add the minimum FICO score. So the formula would be:

    F = ((V – 501) * (550 / 489)) + 300

    Using this formula a perfect Vantagescore of 990 would translate to an 850 FICO. You could also reverse the formula to translate FICO to Vantage:

    V = ((F – 300) * (489 / 550)) + 501

    Of course, since the scoring methodologies for the two scoring systems are quite different none of this really matters much. The math is just fun.

    • Josh April 19, 2013 at 12:03PM

      Yeah this is way off. My Vantage score is 685 and FICO is 625. By your calculation my FICO is 507. Math IS fun… unless you’re really wrong.

  11. billy jones August 9, 2012 at 9:39PM

    Good article, Michael.

  12. PJ February 8, 2012 at 6:34AM

    I checked my VantageScore first and had a 871 there. Since I have always depended on FICO, using the simple math that other websites mentioned, it translated to 747 (871*0.86) on FICO. I knew my score was higher than that and so I paid to get my FICO score – which was 797 ( I really wanted that 800…lol)
    So a simple extrapolation of the scores would not work – as rightly mentioned by CreditCardGuru

    I would not pay for my Vantage score. Thanks for the article.

  13. Bernice Boyer January 3, 2012 at 7:02PM

    I was not aware there was a different credit scoring system. Thank you for enlightening me. CreditCardForum is helping me so much.

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