FICO vs. VantageScore
What is the difference?
Have you ever checked your credit score on a free credit monitoring tool and saw one number, but when you went to apply for a loan or credit card your score was actually an entirely different number? This is because there are different credit score model variants, but let's focus on the two most common models: the FICO Credit Score and the VantageScore. These scores are used to determine how likely you are to pay back money borrowed, or your “creditworthiness.”
They are developed by different companies and have some key differences. Let's break down what sets them apart:
What is a FICO Score?
The FICO Score is the original credit score, created by the Fair Isaac Corporation (FICO). This is the score SOCU uses for our loan decisions.
FICO Scores are calculated based on five main factors, each with a different weight:
Payment History (35%): Do you pay your bills on time? This is the single biggest factor.
Amounts Owed (30%): How much debt you carry, especially compared to your credit limits (your credit use ratio).
Length of Credit History (15%): The average age of your accounts and the age of your oldest account.
New Credit (10%): How many new accounts you've recently opened and the number of hard inquiries on your report.
Credit Mix (10%): The variety of credit you have, such as credit cards, mortgages, and auto loans..
When you apply for credit, like a loan or credit card, the lender performs a "hard pull" to review your financial history. Hard pulls typically show your FICO score. It requires your permission to pull, is recorded on your credit report for up to two years, and can temporarily cause your score to dip. An exception is often made for "rate shopping," where multiple inquiries for the same type of loan within a short timeframe are treated as a single inquiry.
What is a VantageScore?
VantageScore was created by the three major credit bureaus: Equifax, Experian, and TransUnion. It was designed to be a more consistent and inclusive competitor to FICO.
You’re most likely to see a VantageScore when you check your credit through free credit monitoring services, apps, or websites (like the one in our online banking portal.) It uses a similar 300-850 point range but categorizes its scoring factors by their level of influence rather than by percentages.
The influential factors for a VantageScore are:
Extremely Influential: Payment history
Highly Influential: Age and type of credit, and your credit utilization
Moderately Influential: Total balance and debt
Less Influential: Recent credit behavior and available credit
When you use a free credit monitoring tool to check your own credit, you are initiating a soft pull, and the score provided is often a VantageScore. A soft pull, also known as a soft credit inquiry, is a background review of your credit that does not affect your score. These inquiries don't always require your permission and are used by employers for background checks or by lenders to create pre-approval offers. Because these inquiries are not visible to potential lenders on your credit report, you can check your credit as frequently as you wish with no negative impact.
Key Differences at a Glance
So, what are the practical differences between the two?
| Feature | FICO Score | VantageScore |
|---|---|---|
| Who Uses It? | The typical choice for lenders (mortgages, auto, credit cards). | Primarily used by consumers on free apps and by some landlords and lenders. |
| History Needed | Requires at least one account open for 6 months or more. | Can generate a score with just 1 month of credit history. |
| "Shopping Around" | Groups multiple inquiries (e.g., for a car loan) in a 45-day window as one. | Groups multiple inquiries in a 14-day window as one. |
| Inclusivity | Less likely to score individuals with very limited credit history. | Better at scoring people with less history, helping more people get credit scores. |
So Which Score Matters More?
The simple answer is: The one your lender is using.
When you're applying for a mortgage, car loan, or a new credit card, the lender is most likely going to pull your FICO Score.
However, that doesn't mean your VantageScore isn’t important! The score you see on credit monitoring tools is an excellent way to track your overall credit health. The specific number might differ from your FICO Score, but the behaviors that make one score go up will make the other go up, too.
If you’re looking to build either one of your credit scores, focus on the basics of good credit:
Pay all your bills on time.
Keep your credit card balances low (ideally below 30% of your limit).
Don't open too many new accounts at once.
Keep old credit accounts open to lengthen your credit history.
Do these things, and both your FICO Score and your VantageScore will see improvement!
Are you looking for a more personalized approach to improving your credit? Schedule an appointment with one of our FREE Credit Counselors. They can put you on a plan tailored to you and your needs or goals.