The gist: Your VantageScore is a credit score that Equifax, TransUnion, and Experian calculate together. A VantageScore needs less history than what FICO requires to generate a score and for this reason the VantageScore model is particularly useful for people just getting started with, and beginning to build, credit.

VantageScore is a quick and easy way for lenders to get a picture of how well you manage credit. The stronger your credit history, the higher the score, which ranges from 300 to 800.

When the credit bureaus first developed the VantageScore model, they used a range of 501 to 990 and a corresponding letter grade from A to F. However, in recent years they switched to the same range used in FICO scores. This alignment makes it easier for lenders and consumers to interpret the score because the range is familiar.  

The factors and weightings VantageScore uses is similar to the FICO score, however, VantageScore does claim to have a few differences that makes the score unique.

What is a VantageScore?

Lenders need to get a sense of how well you manage credit. They need to know if you can repay in full and on time. The best way for them to understand your creditworthiness is to look at your credit history.

However, credit histories are long and detailed. Lenders don’t have time to comb through pages of data. This is why they rely on credit scoring models like VantageScore which represents your complete credit history with a single number that’s easy to interpret. Credit card companies, mortgage providers, auto loan issuers and loan officers all use some kind of credit score whether it’s VantageScore or FICO. In fact, some use a combination of the two.

Equifax, TransUnion, and Experian first released VantageScore in 2006. Since then, there have been several updates which led to the release of VantageScore 2.0 in 2010, then 3.0 in 2013. This was the model that finally adopted the 300 to 800 range. In 2017 the credit bureaus released the 4.0 version which is the most current.

Each update to VantageScore is intended to give creditors a more accurate picture of you as a borrower. For example, the latest version, VantageScore 4.0, “leverages machine learning techniques in the development of scorecards for consumers with limited credit histories” according to the bureaus. This means that VantageScore can assess the creditworthiness of 37 million more consumers that would otherwise not have enough history to receive a score from other models. 

Is a VantageScore the same as a FICO score?

No. 

The two have many similarities but they are different. In fact, VantageScore and FICO are competitors. Equifax, TransUnion, and Experian developed VantageScore independently of FICO which the Fair Isaac Corporation developed in 1989, more than 15 years before VantageScore existed.

These are the main differences between the two scores:

A VantageScore is only calculated one way, FICO is not

All three credit bureaus use the same method to calculate the VantageScore. In contrast, the FICO score calculation is customized to each of the three main credit bureaus. 

A VantageScore needs less history than what FICO requires to generate a score

The VantageScore model only needs one month of history and one account reported within the previous 24 months. For this reason the VantageScore model is particularly useful for people just getting started with credit. The FICO model requires you to have at least one account that has been open for at least six months and that has reported to the credit bureaus in that period. 

A VantageScore has a shorter widow for counting multiple inquiries as one

When you shop for a loan you’ll likely want to consider several lenders. This means that those lenders each make an inquiry on your credit. Each of these “hard” inquiries reduces your score slightly. However, the VantageScore model allows multiple credit inquiries for multiple types of loans within a 14-day window to count as one inquiry. The FICO model uses a 45-day window but the inquiries must be for the same type of loan.

A VantageScore has begun giving less weight to tax liens, FICO has not 

Starting in 2017, VantageScore started to give less weight to tax liens in their score calculation whereas FICO did not.

How is a VantageScore calculated?

The VantageScore model assesses six areas of your credit profile to calculate the score. Those areas and their weightings are:

• Payment history        41%
• Age and mix of credit 20%
• Credit utilization         20%
• New credit         11%
• Balance                 6%
• Available credit                      2%

Why are there different VantageScores?

Since Equifax, TransUnion, and Experian released VantageScore in 2006 they have made improvements to the model. There have been four revisions to date.

Even though the 4.0 model is the most recent version, the most widely used version is the 3.0 VantageScore model because it is what lenders are accustomed to and adopting a new model - like 4.0 - can be cumbersome.

What does my VantageScore mean?

Your VantageScore tells lenders how well you’ve used credit in the past. Your number corresponds to a ranking. Those rankings are:

• Excellent: 781 to 850
• Good: 661 to 780
• Fair: 601 to 660
• Poor: 500 to 600
• Very Poor: 300 to 499

How can I improve my VantageScore?

Improving your VantageScore means focusing on the three most influential factors.

Payment history

The single largest influence on your VantageScore is your ability to consistently make the required payments and your ability to make them on time.

Age and mix of credit 

The longer you’ve been using credit the better your score will be. You’ll also want to demonstrate that you can manage different kinds of credit like an auto loan and a credit card or a personal loan.

Credit utilization

Aim to use about 30% of your available credit at any given time. Using more than this amount could hurt your score because it indicates that you might be too reliant on credit.

How is a VantageScore different from a credit score?

A VantageScore is one kind of credit score. The other kind is the FICO score which is used in about 90% of lending decisions.