Who Uses VantageScore and Who Uses FICO?

Shoshanna Cohen  | 

VantageScore, the new competitor to FICO, is the hot new thing in the credit scoring world. But what does that actually mean to you as a consumer? While the two scores do many of the same things, there are some differences in how they are used in the real world.

What Are Credit Scores Used For?

In general, both FICO scores and VantageScores can be used for the same purposes. They help lenders like credit card companies, mortgage lenders, and auto lenders decide how reliable of a borrower you’re going to be. Your score is the major deciding factor in whether you qualify for a credit card or loan, and what your interest rate will look like.

But another key use for credit scores is in helping you, as a consumer, understand your financial situation. By learning your credit score and the factors that go into calculating it, you can get a better grasp on your financial habits, how they are setting you up for (or keeping you away from) borrowing opportunities, and how to remedy them.

Do Lenders Use FICO or VantageScore? Does It Matter?

VantageScore is becoming more widely used by lenders when they decide whether to extend credit to you, and is used by many of the top banks and lending institutions. However, FICO is still used in the majority of lending decisions.

While the two scoring companies use different methods to calculate your score, the resulting scores are usually pretty similar, so it doesn’t matter that much which model your lender uses. While initially VantageScore provided an advantage versus FICO for people without much credit history, Fair Isaac Corporation (the company behind FICO) has introduced FICO XD as a competitor, which does the same thing. If it’s important to you to use one score versus the other, you can check with a loan officer or mortgage broker to find a lender that works with that model.

Which Score Should I Use to Check My Credit?

Beyond its use as a predictor of borrowing behavior, your credit score is a powerful tool to help you understand and improve your financial profile. VantageScore is used for this purpose much more than FICO. But since VantageScores and FICO scores are typically quite similar, you can use your VantageScore as a predictor of what your FICO will probably look like too.

VantageScore makes credit scores available for free through a number of websites. It is also common these days to have access to free credit monitoring from your credit card company or bank, which is usually provided by VantageScore as well.

Make sure that when you’re requesting your credit score for informational purposes, you choose a soft inquiry rather than a hard inquiry, which ironically can damage your credit. VantageScore does not penalize you for making soft inquiries, so you can request them as often as you like.

The reason this is so important is that when you keep an eye on your credit, you’ll discover red flags that are hurting your credit—like fraud, unpaid bills being sent to collections, and patterns of late payments—sooner rather than later. Use credit inquiries as an early warning system so you can get in front of issues before they have a chance to hurt you, instead of finding out about them at inopportune times, such as when applying for a mortgage or signing up for a credit card so you can cover a large expense. As the saying goes, if you stay ready, you don’t have to get ready.

Your FICO score and your VantageScore are both reliable indicators of your financial health. The main difference between them is the situations in which they are used: For the most part, FICO is used by financial institutions to decide whether to extend credit to you, and VantageScore is used by you to find out how your credit looks. Each is an important piece of the credit puzzle.


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Shoshanna Cohen is a writer based in Boise, Idaho. Her interests include health, fitness, finance, and culture.

This post was updated July 28, 2017. It was originally published August 6, 2017.