Your credit score can be one of the most important numbers in handling your personal finances. It can determine important interest rates like your mortgage or an auto loan, your insurance rates, and it can even be the deciding factor in a job application.

When most people think of their credit score, they think of just one three-digit number. In fact, every consumer has dozens of credit scores based on different scoring models. The two most popular scoring models are currently FICO Score 8 and VantageScore 3.0.

But depending on where you check your credit score, you'll get either a FICO score or a VantageScore. And the two scores can be wildly different even if they both use data from the same credit reporting agency. That's why it's important to know the differences between a FICO score and a VantageScore.

A computer with a graph indicating a good credit score.

Image source: Getty Images.

Similarities in FICO and VantageScore

  • Both most commonly use a range of 300 to 850. Older versions of VantageScore (1.0 and 2.0) used a range from 500 to 990. Some FICO scoring models for specific industries have a broader range.
  • Both are derived from information on your credit report from Equifax, Experian, or TransUnion.
  • Both are used by lenders to determine credit risk of potential customers.

Even their similarities aren't that similar. While both scoring models are used to determine credit risk, 90% of lenders rely on FICO scores instead of VantageScores to make those decisions. And while they both use the same data, the way they use that data differs drastically between the two scoring models.

How FICO calculates your credit score

FICO offers fairly explicit details on how its scoring model calculates your credit score. It uses five main factors with the following weights:

  • 35% payment history. If you've always paid your bills on time, you'll be one-third of the way to a perfect score. The more severe, recent, and frequent you've had any late payments, the greater the impact on your FICO Score.
  • 30% credit utilization. FICO Score 8 considers the total of how much you owe across all of your accounts, but more importantly, it factors in what percentage of your available credit you use.
  • 15% length of credit history. This includes the age of your oldest account, the average age of all of your accounts, and the age of specific types of accounts (credit, auto loan, etc.).
  • 10% new credit. This factor considers the number of new accounts, how long it's been since you opened a new account, and recent hard inquiries on your report.
  • 10% credit mix. Having a variety of different types of credit accounts will improve your score.

How VantageScore calculates your credit score

VantageScore isn't nearly as specific as FICO when it comes to how it determines your credit score using its scoring model. It provides a rough outline of factors it considers important and those it considers less important.

  • Extremely influential -- payment history. Just like FICO Score, VantageScore puts payment history at the top of the list. It won't say how much it weighs it in factoring your overall score, though.
  • Highly influential -- age & type of credit, credit utilization. It's unclear if VantageScore weighs credit mix or credit length more or less than FICO because it lumps both of them into one category it deems "highly influential." Credit utilization is weighed heavily in both the VantageScore and FICO Score models.
  • Moderately influential -- total balances. VantageScore separates out total balances from the credit utilization factor, but it's only moderately influential. That seems similar to how FICO factors in credit utilization, putting a larger emphasis on lower utilization than it does on lower total balances.
  • Less influential -- available credit, recent credit behavior & inquiries. VantageScore may benefit consumers with less available overall credit, suggesting you only open credit you need. Similar to FICO Score, VantageScore likes to see fewer hard inquiries on your report.

More differences between FICO and VantageScore

Beyond the big scoring differences, there are a few more subtle differences between FICO and VantageScore:

  • VantageScore affords consumers 14 days to rate shop new loans. FICO provides 45 days.
  • VantageScore includes rent, utility, cable, and phone bill payments in your score. FICO doesn't include those factors in its scoring model.
  • VantageScore weighs a late mortgage payment more heavily than late payments on other debts.
  • VantageScore doesn't factor in paid collections. FICO Score 9 also drops paid collections, but the more popular FICO Score 8 still does.

FICO Score vs VantageScore

If you're looking to get a good idea of what potential lenders will see when they check your credit, you'll want to get a FICO score. Preferably, you'll get a score based on data from each credit bureau. 90% of lending decisions are based on some form of the FICO scoring model.

Using VantageScore as part of your decision making for loan or credit card applications can provide a false sense of confidence depending on your credit history. It also might suggest you apply for an inferior loan or product because it has a lower score than your FICO Score.

VantageScore is still useful for keeping an eye on trends. It's very likely changes in your VantageScore will correlate with changes in your FICO Score. If you can't access one of your FICO scores, a VantageScore is certainly better than nothing.

Adam Levy has no position in any of the stocks mentioned. The Motley Fool recommends Experian. The Motley Fool has a disclosure policy.