FICO scores have become an important part of all lending decisions. Over the last decade, FICO’s lead has been cut short by VantageScore. It uses similar scoring methods as FICO but relies on a collaboration between Experian, Equifax, and TransUnion, the three major credit reporting agencies. So its results are a bit different. For you, it matters because you may need to check different scores for different needs or goals.

Model Difference

Now, FICO and VantageScore aren’t the only scoring models. Lenders use several to work out how credit-worthy you are. But these two are the only scores you’re likely to see. Both depend on your payment history, length of credit, types of credit, credit usage, and recent inquiries. But their scoring models are different. FICO gathers reports from the three major CRAs and analyzes millions of consumer’s data to generate a scoring model. VantageScore uses a combined set of consumer credit files from the same CRAs and comes up with a single formula.

Variance in Scoring

If you have a short credit history, check VantageScore. It only requires one month of history and one account reported in the last two years. FICO needs at least six months of history and at least one account reported to a CRA in the previous six months. VantageScore can issue scores to millions of people who won’t qualify for FICO scores.

Late Payments

A history of late payments will hurt both scores. Both models check how recently your last late payment occurred, how many of your accounts have had late payments, and how many payments you’ve missed on an account. While FICO treats all late payments the same, Vantage judges them differently, e.g., you’ll be judged more harshly for late mortgage payments than other payments.

Credit Inquiry

Both penalize consumers if they open too many credit cards in a short time. This is because lenders run a hard inquiry to check creditworthiness. But both do deduplication and counts multiple inquiries within a certain timespan as one inquiry,

Low-Balance Collections

Both have penalties for accounts sent to collection agencies. But FICO ignores all collections if the original balance was under $100. VantageScore doesn’t. Both ignore collections that have been paid off.