If you monitor your credit using a free website, chances are you’ve seen your Vantage Score. However, you may not realize that this credit score is not your FICO score.So, what is a Vantage Score in comparison to your FICO Credit Score? Is one better than the other? We’ll compare and contrast the two types of credit scores and discuss the merits of each in this article.
What Is A Vantage Credit Score
The Vantage Score credit score, sometimes referred to as a ‘“Vantage Credit Score,” is a credit scoring model created in 2006 by the three major credit bureaus (Experian, TransUnion, and Equifax) to compete with FICO’s credit scoring models.Vantage Score is a tri-bureau credit score, meaning the exact same model is used at each credit bureau. The most commonly used version of the VantageScore used by lenders today is the third iteration of the credit scoring model, VantageScore 3.0.VantageScore Solutions, LLC has released VantageScore 4.0, which is supposed to be more accurate than previous versions, but since it takes lenders a long time to adopt new credit scoring models, most are still using VantageScore 3.0.
Who Uses A Vantage Score?
According to Experian, The Vantage Score, scoring model is used by lenders for all types of loans except mortgages, where FICO is still the dominant player. The largest group of financial institutions that uses Vantage Score is credit card issuers.Non-Financial institutions have also increasingly been adopting VantageScore, such as landlords and utility providers.Vantage Score is also widely used by consumer websites that provide educational credit scores and market credit products.
How Do You Find Out What Your Vantage Score Is?
It’s easy to find out what your Vantage Score is for free. Credit Karma provides free VantageScore 3.0 credit scores from TransUnion and Equifax, so all you have to do is create an account on creditkarma.com and log in to your Credit Karma account to see your free Vantage Credit Score.
VantageScore Vs. FICO Score The primary difference between Vantage Score and FICO scores is what they are used for. FICO scores have been in use for a longer period of time and, consequently, are most widely used by lenders to make lending decisions. According to U.S. News. FICO scores are used by 90% of “top lenders”. While VantageScore credit scores are also used by some lenders, they are more well-known for their use as an educational tool.Both FICO and Vantage Score consider the same general categories of information from your credit report (although they use slightly different terms to describe them), which include:
- Payment History
- Credit Utilization
- Length of Credit History / Age
- Mix Of Accounts / Types of Credit
- New Credit Activity / Recent Credit
Since the scores share the same general categories, it is safe to assume that they will both be bolstered by the same common-sense behaviors that lead to good credit, such as not using too much of your available credit and not missing payments. Learn more about how to to calculate your vantage score in our FICO vs. Vantage Score Calculation post.
Have additional questions about ways the two different scoring models may effect your ability to get approved for the credit you need? Contact us today for a customized consultation where we’ll walk you through your credit reports and help you determine if you’re ready to start applying.