Vantage Score vs FICO Score
We’ve all seen the funny commercials for “free” credit report with the guy playing guitar and singing a silly song about how he ended up in a terrible credit situation. The site he works for is owned by Experian, one of the major consumer reporting agencies. What these commercials do not explain is the score they’re referring to. The three major consumer reporting agencies: Experian, TransUnion, and Equifax, have their own credit scoring model called Vantage Score. This is not a FICO score, which is the classic credit model that’s been around for decades. So when it comes to Vantage Score vs FICO score, what’s the difference?
The differences are small but there are some things that smart consumers need to know.
First, a brief history. FICO is short for Fair Isaac Corp.
They built the first credit model in the 50’s, and by the 80’s, everyone used their model and scoring system.
The consumer reporting agencies built their model in 2006. The current 3.0 model now uses the same scoring system as FICO.
When you go to one of the consumer reporting agencies and get your score, you’re likely going to receive your VantageScore. When applying for a mortgage or car loan, you’re much more likely going to see a FICO score.
However, VantageScore has increased its share of the market, most likely because lenders are utilizing both scores instead of one over the other.
When it comes to mortgages, FICO is the score you need to know. Currently, it is the only score that is government approved.
Is this a bad thing?
Not really. VantageScore has a heavier penalization for late mortgage payments. In fact, if you’re looking to buy a rental property or take out a second mortgage for some reason, the FICO score won’t be quite as brutal.
Getting behind on your mortgage payment can be devastating to your credit. Here are some tips to keep it from happening.
Another major difference is that when you’re shopping around for a mortgage or car, VantageScore will give you 14 days for all of those hard credit inquiries to be counted as one.
FICO gives you a total of 45 days.
The bottom line in the Vantage Score vs FICO score debate comes down to the FICO score remaining the most heavily used by lenders for major lending decisions. So, if you have to choose one over the other, go with FICO.
Ways to check your scores
Discover will give everyone a free FICO credit score card, even if they aren’t customers. In addition, American Express offers FICO scores with some of their credit cards.
Capital One offers a free Vantage Score for their customers.
There are dozens of websites that will offer a free Vantage Score and some even come with free reports. As far as easiest ways to look at a score and report in the battle of Vantage Score vs FICO scores, Vantage Score gets the “W” here.
Start improving your credit today
If your credit is struggling, there are plenty of ways that you can improve the score.
The most important thing is to always make your payments on time. That alone is going to take you far in the credit score game and increase your score with both models.
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