Let's Talk Vantage Scores Vs. FICO Scores... · LetsGetFunded Starter (Free)

Let's Talk Vantage Scores Vs. FICO Scores...

VantageScore is used by over 3,700 institutions, including banks and FinTech's, for funding applications across various products, from credit cards to mortgages. Although FICO scores have traditionally been the industry standard, VantageScore's use has increased significantly, with 42 billion scores used in 2024 alone.

Adoption across lending products

VantageScore is used for many different types of applications:

Credit cards: In 2024, VantageScore usage by credit card lenders grew by 142%, a major driver of the model's overall expansion.
Personal loans and auto loans: Many banks and lenders use VantageScore 4.0 for personal and auto loan applications.
Mortgages: In a significant development, the Federal Housing Finance Agency (FHFA) now requires Fannie Mae and Freddie Mac to accept VantageScore 4.0 for mortgages. This change, effective immediately as of July 2025, opens up the mortgage market to millions of borrowers with "thin files" who were previously un-scorable by traditional models.
Rental screening: Telecommunication, utility, and rental screening organizations also use VantageScore, with usage growing by over 2,900% in 2024.

Comparison with FICO scores

While VantageScore is increasingly prevalent, FICO scores still hold a majority share of the market, particularly for legacy and specialized loan programs. However, there are key distinctions that have helped increase VantageScore's adoption:

Less credit history required: VantageScore can generate a score with as little as one or two months of credit history, compared to FICO's typical six-month requirement. This makes it easier to score consumers who are new to credit.
Alternative data: The VantageScore 4.0 model incorporates alternative data sources, such as rent and utility payments, to provide a more inclusive assessment of creditworthiness.
Increasing competition: The FHFA's mandate for mortgages has eroded FICO's long-standing monopoly in that market and encouraged greater competition in the credit scoring industry.

What this means for consumers

Since lenders can use either FICO or VantageScore—or even a proprietary model—it is wise to monitor both scores to have a complete view of your credit health. If you have limited credit history, your VantageScore may be more representative of your creditworthiness than your FICO score.

If you are applying for a loan, you can ask the lender which credit scoring model they will use for your application. 💯🙏🏽

Free Credit Scores - VantageScore

VantageScore vs FICO: How Credit Score Models Differ

1 comment