FICO and Vantage are the two most commonly used credit scoring algorithms used today. They are used for a variety of purposes and you should understand how they both work as they will impact your life in several ways. Understanding the differences between FICO vs Vantage is important to manage your credit.
But first, let’s talk why credit scores exist in the first place. They are meant to judge a person’s creditworthiness. They show how likely are you going to repay debts as agreed and how unlikely is it for you to get into financial trouble.
Credit scores are just a way for a lender to get a probability that if they enter into an agreement with you, that you will uphold your end of the bargain and be able to pay on time and in full.
Types of Credit Scores
Lets start with the most commonly used scores, the FICO 8 and the Vantage 3.0 score. On the surface they seem very similar:
- Both have a credit score range of 300 to 850
- Each score uses data from the three credit bureaus: Equifax, Experian and Transunion
- They use payment history, amount of debt, credit mix, and so forth to generate a score
However, they are used for completely different things . In addition, your actual score can be drastically different between the two. As a result, many people have more than 100 point difference between their FICO vs Vantage scores. That can the be the difference from having a very good score to a poor score. The better your score, the better terms you will get when you borrow money and minimize the interest you pay.
This is why it is important to track all of your scores and know when they will get used. In general the following applies for when you will need to know your FICO score versus your Vantage score:
- Typically when you are looking to borrow money or get a line of credit a FICO score will be used:
- Auto loan
- Credit card
- Mortgage
- Personal loan
- When borrowing money, but entering into an agreement where you will be paying someone or they need to understand your tendencies better a Vantage score is used:
- Renting or leasing an apartment
- Signing up for cell phone service
- Turning on utilities at your home / apartment
- Employment background checks
Getting Free FICO and Vantage Scores
You can get your credit scores from a variety of sites for free:
- Experian.com provides FICO 8 scores
- Wallethub.com provides Vantage 3.0 scores using Transunion data
- CreditKarma.com provides Vantage 3.0 scores using Transunion and Eqiufax data
This is just some of the basics on the differences between FICO and Vantage. Watch the video below to learn more on those differences: