The Differences Between VantageScore and FICO Credit Scores

Have you ever checked your Credit Karma account, saw your credit scores, then you go to MyScoreIQ, and see that your scores are completely different? It’s because they use different scoring systems- VantageScore (Credit Karma) and FICO Scores (MyScoreIQ).

Knowing how to effectively read your credit reports and how your score is calculated is paramount to you knowing how to improve it. So, let me break down the two major and common scoring system- VantageScore and FICO Scores.

What is VantageScore and how is it calculated?

VantageScore was developed in 2006 by Experian, Equifax, and Transunion

The scores range from 300 to 850

What makes up your VantageScore?

• Payment History- The biggest factor that accounts for 40% of score. So, paying your cards/loans on time is vital to having a great score

• Depth of Credit- 21% of your score. This is how long you’ve had credit for

• Credit utilization- 20% of your score. Best practice is to pay your credit cards in full by the statement date, but no more than 30% is fine

• Balances- 11% of your score. The total amount of each card

• Recent Credit- 5% of your score. This is your new inquiries/accounts

• Available Credit- 3% of your credit

What is FICO Score and how is it calculated?

Fair Isaac Corporation (FICO) was developed in 1989, and just like the VantageScore, the scores range from 300-850. However, it is calculated differently from the VantageScore

What makes up your FICO Scores?

• One of the biggest factors is your payment history, so paying your cards/loans on time is vital to having a “great” credit score. It is worth 35% of your score

• Second one is your credit utilization. Best practice is to pay your credit cards in full every month. But keeping it under 30% is good, under 10% is great. It is worth 30% of your score

• Third is your type of credit. You know your credit cards, loans (cars, installment, mortgage). It is worth 15% of your score

• Then, you have your new credit (inquiries). It is 10% of you score

• Finally, there is your length of credit. That is also 10% of your score

Now that I’ve gone over the ways the two main credit scores are calculated, now you see why your scores are different-It is calculated differently. Both scores are accurate, it all depends on which one the lender is using. Although some lenders do use the VantageScore model, but 90% of lenders use the FICO model.

If you need help disputing errors on your reports, you can find everything you need in our DIY Credit Repair Kit. When disputing errors on your reports, be sure to stay organized and remain consistent.

Ok loves, remember to always monitor your credit reports!