FICO vs. Vantage Score

FICO now competes with Vantage Score but Equifax, Experian and TransUnion still offer both score options. This is partly because FICO is so widely used and accepted.

The goal of the credit bureaus is to wean users off the FICO model and start using Vantage Score instead. Due to the overwhelming majority of lenders and credit issuer’s familiarity with the FICO model, the Vantage Score has not taken the credit world by storm as fast as the “Big 3” would have liked.

All three credit bureaus now offer Vantage Score in addition to FICO score to calculate the credit score, instead of only offering FICOs.

In reality, it really makes no difference in credit score variations. Credit score variations are inevitable because the data the credit bureaus collect is still derived from different sources, not all data furnishers report their information to all of the credit reporting agencies. So the problem of varying credit scores will not be solved by the new Vantage Score.

The three bureaus are branding the Vantage Score as something that will help banks and lenders further hone the subprime categories. Subprime lenders are those banks and lenders dedicated to borrowers with poor credit or harder to approve loans. Subprime loans have higher interest rates and fat lending fees.

In today’s credit crunched economy, this is a fast growing market and the credit bureaus are hoping to use that as a selling point for Vantage Score. Slick marketing!

Unlike FICO’s traditional 300 to 850 scale, the Vantage Score goes from 501 to 990. Here is a breakdown of the scores with the respective rating:

  • A: 901–990
  • B: 801–900
  • C: 701–800
  • D: 601–700
  • F: 501–600

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