You’re likely aware that you have a credit score, but you may be wondering how that’s different from a FICO credit score, or if it’s the same thing.
The most important concept to understand is this: there’s no such thing as a standalone “credit score.”
All credit scores are provided by companies that calculate them—the biggest companies being FICO and VantageScore. That means any score you’re looking at is a FICO credit score, a VantageScore credit score, or some other company’s credit score.
If you recently checked your credit or received word that a loan or application was denied based on your credit score, it’s important to check which company furnished that score.
We’ll go over what credit scores are, which company’s credit score matters most, and why you have so many of them.
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What’s a credit score?
A credit score is a number produced by a credit-scoring company that represents how risky it is to lend you money. Credit scores are generated by credit-scoring models. These models analyze the positive and negative data in your credit reports at each credit bureau, Equifax, Transunion, and Experian, and calculate a credit score. Credit scores usually range between 300 (the worst score) to 850.
Although credit scores differ from credit reports, if your credit reports have a lot of negative items (like bankruptcies, late payments, or collection accounts), you’ll have a low credit score. Conversely, if your credit reports show you’re responsible with money and pay back your debts on time, you’ll have a high credit score.
By far, the most well-known and widely-used credit scoring company is FICO. Its main competitor, VantageScore, also produces credit scores, but they’re much less widely used. However, anyone can produce a credit score. Some banks, lenders, and credit issuers have their own proprietary credit-scoring models.
What’s a FICO score?
A FICO score is a credit score produced by the Fair Isaac Corporation (FICO). While FICO has been in the credit scoring business since the 1950s, they invented the first general-purpose credit score (your FICO score) in 1989.
Again, not all credit scores are FICO scores. If you recently checked your credit with a major online credit checking service like CreditKarma, WalletHub, or CreditSesame, you were provided with a VantageScore credit score. In addition, credit card companies like Capital One and Chase also provide you with VantageScore credit scores if you’re a cardholder.
Which credit score matters most: FICO or VantageScore?
Your FICO score matters more. Lenders and creditors use FICO scores in 90% of lending decisions. That means if you decide to apply for a credit card or a loan of any kind, 9 times out of 10, that company will check your FICO score to see if you’re creditworthy.
However, it’s important to know that there are multiple versions of your FICO credit score. There are industry-specific versions of your FICO score (e.g., if you’re applying for a mortgage or an auto loan), and bureau-specific versions of your FICO score (e.g., TransUnion vs. Equifax).
While your FICO score matters most, it’s also important to know which version your lender is using.
Which FICO version matters most?
Your FICO Score 8 credit score matters the most. There are other versions, including FICO 9 and the newly released FICO 10 Suite, as well as alternative scoring models like FICO Score XD. However, most lenders still use FICO Score 8 to make lending decisions.
However, there are other industry-specific versions of your FICO score that may be used. Those include:
- FICO Score 2, 4, and 5: Used in mortgage lending
- FICO Auto Score 2, 4, 5, and 8: Used in auto lending
- FICO Bankcard Score 2, 4, 5, and 8: Used in credit card issuing
Note that FICO Auto Score 8 and Bankcard Score 8 use your FICO Score 8 credit score as a base for further industry-specific calculations—but they are not the same thing.
Which VantageScore version matters most?
Your VantageScore 3.0 credit score matters the most. Although VantageScore isn’t used by most lenders, it’s likely you’ve checked their score because most major credit-checking services partner with them and not FICO.
Fortunately, most of those credit-checking services provide you with a VantageScore 3.0, which is more used than their latest model, VantageScore 4.0.
What’s the difference between FICO and VantageScore?
If you did receive a VantageScore, and are now learning that your FICO score matters more, you’re probably wondering if there’s a big difference.
Overall, it’s likely that if you have a high VantageScore credit score, you’ll have a high FICO score, and vice versa. That’s because both models measure essentially the same factors in your credit reports.
While there are noteworthy differences between VantageScore and FICO, if you’ve been responsible with your credit and debts, both models will give you a good score.