Credit Score 101: VantageScore for Beginners vs. FICO Score

Your credit score is a vital part of your financial health. So vital, in fact, that with just three simple digits, lenders can get a pretty strong idea of your creditworthiness to determine your interest rates, payment plans, and qualifying offers.

What are FICO® scores?

The FICO score has been almost synonymous with “credit score” since the 90s.¹ FICO scores assess your creditworthiness by tracking your payment history, amounts owed, credit history, credit mix, and new credit.

What is a VantageScores?

Like a FICO score, a VantageScore is a credit scoring model that tells lenders and creditors how likely you are to fall at least 90 days behind on a bill within the next 24 months.

The higher your score, the better your credit.² A VantageScore assesses many of the same credit behaviors as FICO scores, though it weighs and considers many of the factors that make up your credit score differently.

Then what’s the real difference between a FICO score and a VantageScore?

The primary difference between the two is credit history: A FICO score requires six months of credit history, while a VantageScore requires only one month.³

Another key difference: A VantageScore gives you a little less time to shop around for rates. You may already know that when you apply for a loan or credit card, the lender performs a hard inquiry on your credit file. When you apply for multiple loans within a short period of time, inquiries are de-duped and the impact is generally minimal. However, if you apply for loans over an extended period of time, your score may see greater impact.

Of course, rate shopping requires several inquiries in a short amount of time, which is why FICO effectively treats all inquiries within 45 days as just one inquiry. VantageScore, however, sees all inquiries within just 14 days as one inquiry, leaving a little less breathing room.⁴

A handy chart for your comparison:

How do I raise my VantageScore?

Start with the obvious: Pay your credit cards, loans, mortgages, utilities, and other monthly payments on time. Late or missed payments won’t do you any favors.

Don’t tie up too much of your available credit at any given time.⁵ This can affect your credit utilization for the worse.

If you have a short credit history or a low credit score, you can also ask utilities and landlords to report payments to credit reporting agencies to help raise your score. There are even some online services that will handle it all for you.⁶

And remember, people make mistakes. Even the credit people. So check your reports yearly and correct any mistakes.

Plan for your future.

VantageScore’s credit scores are a great way for people with no credit history or certain types of debt to position themselves for a loan or new line of credit, but knowing both your FICO score and VantageScore can help you make smarter financial decisions in the future. No matter which credit score you’re using, you can guarantee it will benefit from prudent financial habits.

Make your payments on time, keep your utilization rates reasonable, and try to avoid numerous inquires over extended periods of time. You’ll be well on your way to that coveted 850 score.