Advertiser Disclosure

What Is a VantageScore?

A VantageScore is a credit score, created by the three major credit bureaus, that measures the same behaviors a FICO score does.
Credit Score, Personal Finance
With so many websites offering free financial tools, it can be hard to know whom to trust. At NerdWallet, we spend literally 1,000s of hours researching partner offers and following strict editorial integrity to match you with the perfect choice. We even share how we make money so you can enjoy our expert advice and researched recommendations with total clarity and confidence.
What Is a VantageScore?

When you think of credit scores, you probably think of FICO scores — the ones produced and sold by Fair Isaac Corp. They’ve been around for decades, and they’re used in about 90% of loan decisions.

FICO scores had no real competition until 2006, when the three major credit reporting bureaus — Experian, TransUnion and Equifax — jointly developed an algorithm to produce a new score. Initially, their VantageScore was on a different scale than FICO, but the most recent revision has a 300-850 scale, just like FICO’s.

VantageScore has begun to get lenders’ attention, and it is widely offered to consumers for free.


Credit score simulator

What happens if…

I pay off this much debt:

Get your score!

Your new score:


At first glance, VantageScore 3.0, the current version, looks a lot like FICO:

  • A score closer to the maximum 850 means better credit.
  • VantageScores are derived from information in your credit reports, just as FICO scores are.
  • Each credit bureau uses its own data in calculating the score, so you have three different scores for each FICO or VantageScore algorithm.
  • Both FICO and VantageScore help potential lenders decide how creditworthy you are when you apply for credit.

In the 12 months ending June 30, 2016, VantageScores were used by 2,400 lenders and other industry participants and 20 of the 25 largest financial institutions. About 8 billion scores were pulled in that time, about a 40% increase from the year before.

VantageScore plans to release version 4.0 to lenders and commercial clients as soon as late 2017 and to consumers in 2018. It will rely less on negative information — such as tax liens and civil judgments — gleaned from public records, and will treat medical collections more leniently. It also will update how data is approached, paying attention to how credit factors are trending.

How VantageScore and FICO scores differ

If your credit report has little to go on, you’re more likely to have a VantageScore than a FICO score, because VantageScore uses alternative data and looks back 24 months for activity. (FICO 8, the most widely used version, looks back only six months.)

If your credit report has little to go on, you’re more likely to have a VantageScore than a FICO score.

If you have established credit and use it regularly, you almost certainly have both types of scores, and they’re likely similar. The strategy for achieving a good score remains the same: paying bills on time and keeping balances low. Conversely, paying late or using too much of your credit limit lowers your score.

Still, there are some significant differences in how the scores are calculated. For one, VantageScore 3.0 does not take into consideration paid collection accounts. If you have one in your credit history, that can make a big difference in most types of FICO scores. VantageScore says paid collections have little or no effect on how much of a credit risk you are.

Another difference is that some consumers who can’t be scored by FICO because of a limited credit history can still get a VantageScore, because the latter takes into consideration recurring payments such as utilities, rent or phone bills. However, FICO is working with partners Equifax and LexisNexis Risk Solutions on an alternative score called FICO XD, which will also factor in alternative data.

VantageScore also:

  • Ignores paid collections (as does the new FICO 9, which is not as widely used as FICO 8)
  • Weights late mortgage payments more heavily than other late payments, though all can damage your score
  • Allows just 14 days for rate-shopping for a car or mortgage (counting all inquiries in that time as one), compared with 45 days for FICO
  • Makes allowances for consumers affected by natural disasters

Check your VantageScore or your FICO score?

“If you’re going to pay for a credit score, get a FICO score,” says NerdWallet personal finance columnist Liz Weston. “It’s the one most likely to be used in big lending decisions.”

But if you simply want to track your credit score over time, a VantageScore will do the trick just as well as a FICO, Weston says. The same behaviors influence them both.

If you want to track your credit score over time, a VantageScore will do as well as a FICO.

FICO is favored by the law in one crucial spot: home mortgages. Right now, it’s the only tool to evaluate credit risk that is approved for use by government-sponsored enterprises such as Fannie Mae and Freddie Mac. And the version being used is FICO 4, which came out in 2004.

But FICO’s effective monopoly on this front could soon be over. A bill was introduced in the House in February 2017 that would allow Fannie and Freddie to look at alternatives to FICO in evaluating credit.

In the meantime, VantageScore is already being used for some auto loans, credit cards and mortgages, and is gaining wider acceptance. And when you apply for credit, you don’t get to choose which score will be used, so it’s good to keep an eye on both your FICO and VantageScore.

Updated March 31, 2017.

About the author