Know the Difference: Your FICO and Vantage Credit Scores Are Not Calculated the Same

Do you know why a credit report that you just obtained shows a different overall "score" than what the bank's report indicates? It could be that you ordered a vantage report....

I asked  Tim Martin of NEMoves to explain it for the layman, and he said, "Often I am asked from consumers why the credit score they are pulling is different from the credit score I see when I preapprove them. 
When it comes to credit score, you can easily be confused there are various custom scoring models with a different scales and methodologies.  Two of the widely used credit scoring models are the FICO and Vantage Score.  While they vary only slightly in how they produce their ratings, their scales are different.  FICO scores range from 350 to 850 whereas Vantage ranges from 501-990.  So, having a 760 credit score on FICO could be considered an “A” credit rating on FICO but a “C” rating on Vantage." 

Vantage Score
Vantage Score is the newest credit scoring model which in direct competition to the classic FICO model.  It is said the current FICO scoring model made it difficult for people with “thin credit lines” to get credit. Thus, the need of an alternative model to better access borrower’s creditworthiness with greater accuracy.
FICO Score
Fair Isaac Corporation (FICO) is sometimes referred to as the classic credit scoring model because it has been used long before Vantage model was created.  The FICO model utilizes particular standard scale for different factors and broadly accepted as a base platform by every company involved in credit reporting business.

Vantage Score is an alternative to FICO credit scoring model to determine one’s creditworthiness. Yet, up to now, the standard score used by most lending institutions is still the classic FICO score. 
Methodology Variations


Vantage score

Payment history - 32%
Utilization- 23%
Balances- 15%
Depth of credit -13%
Recent credit -10%
Available credit-7%

Total- 100%

FICO score

Payment history-35%
Length of credit history -15%
Amounts owed -30%
Types of credit uses - 10%
New credit - 10%

Total- 100%

 Thanks to Tim Martin – Sr. Loan Officer – NMLS #16273 – 203-917-2800 – NE Moves Mortgage

Disclaimer
This article is sole for the educational use of the reader.  The author is not an expert and the information was researched and gathered from sources that were presumed reliable.  This article should not be considered legal, financial or advice of any kind. Any decisions should be made after the consultation of an independent adviser.

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