When it comes to credit score, you could frequently get baffled since lenders and companies providing loans might use its own custom scoring model with a different scale. Many others can relate to such a confusing experience.
One might think his credit score is good enough and be surprised when his credit application is rejected by a certain lender because of a different model of credit score assessment.
Amidst the confusion going on lately about different types of credit score scale, let’s compare two most widely used credit scoring models; i.e. Vantage Score and FICO Score (Fair Isaac Corporation Score) of which the latter is often confused with FICA Score.
The fact is, though there are only some minor variations in the formulas; it’s unlikely that they produce the exact same number from the same credit information. The Vantage Score is based on six variables, versus the five variables used by FICO score. (see the comparison of the two below)
Vantage Score is the newest credit scoring model which in direct competition to the classic FICO model. The methodologies of vantage score are developed by VantageScore Solutions LLC, an independent corporation owned by the three leading credit bureaus, i.e. Equifax, Experian and TransUnion.
It is said the current FICO scoring model made it difficult for people with “thin credit lines” to get credit. Thus, the need of an alternative model to better access borrower’s creditworthiness with greater accuracy.
It is a credit-scoring model invented by a California headquartered company, Fair Isaac Corporation (FICO). Some refer to FICO scoring model as the classic and universal credit scoring model because it has been used widely long before Vantage scoring model came into existence.
The model utilizes particular standard scale for different factors and broadly accepted as a base platform by every company involved in credit reporting business.
Vantage Score vs Classic FICO
The following table lists a number of evident differences between the two credit scoring models.
|Vantage Score||FICO Score|
|Developed by||VantageScore Solutions LLC||Fair Isaac Corporation|
|Letter Grading||A – F||FICO Score Chart|
|Scoring Model||32% – Payment History||35% – Payment History|
|23% – Utilization||15% – Length of Credit History|
|15% – Balances||30% – Amounts Owed|
|13% – Depth of Credit||10% – Type of Credit|
|10% – Recent Credit||10% – New Credit|
|7% – Utilization|
Vantage Score was designed as an alternative to FICO credit scoring model to determine one’s creditworthiness. Yet, up to now, the standard score used by most lending institutions is still the classic FICO score.
It is therefore advisable that you always pay attention on what scoring model used by the lender so you can better interpret your score correctly before you make any loan request.
Useful Tip: Since top Vantage Score is 990, in contrast to the top FICO score of 850, you could multiply your Vantage Score by 0.86 (850/990) to get a rough approximation of your FICO score.
Although by law, you're entitled to receive a free copy of your credit report annually from any of the 3 credit bureaus - Equifax, Experian, and TransUnion, this free report will not reveal your actual credit score.
To view the actual score that the lenders are seeing, get your score (plus 3 in 1 credit report) from Free Score Finder and know know where your credit score stand.