“`html

Understanding VantageScore and FICO Credit Scores

In the U.S., two companies dominate the credit scoring industry: FICO® and VantageScore®. While FICO® is the industry leader, VantageScore® has been gaining market share since its creation by the three major credit reporting agencies in 2006. Both companies develop credit scores that lenders and creditors use to evaluate applicants and manage customer accounts. However, VantageScore and FICO® scoring models use slightly different criteria to determine your scores.

VantageScore and FICO: Multiple Credit Scores

VantageScore and FICO® create credit scoring models—software that analyzes a credit report to generate a credit score. These consumer risk scores aim to predict the likelihood that a person will fall at least 90 days behind on a bill within the next 24 months.

The VantageScore models and the base FICO® models are generic credit scores, meaning they’re created for use by a wide range of creditors, such as private student loan companies, online lenders, and card issuers. FICO® also creates industry-specific auto and bankcard scores, tailored for auto lenders and card issuers.

Both VantageScore and FICO® update their scoring models occasionally to ensure they remain predictive as consumer behavior changes and to incorporate new technology, information, and industry practices.

VantageScore vs. FICO Credit Scores

While VantageScore and FICO® scores try to predict the same thing, their credit scoring models aren’t identical. Here are some of the main differences between the two companies and their scores:

Tri-Bureau vs. Bureau-Specific Models

VantageScore creates a single tri-bureau model that can be used with a credit report from Experian, Equifax, or TransUnion. FICO® creates bureau-specific scoring models, meaning there are three slightly different FICO® Score 9 models—one for each of the major credit reporting agencies.

Minimum Scoring Requirements

For FICO® to create a credit score based on one of your credit reports, you’ll need to have a credit account (or “tradeline”) that’s at least six months old and activity on a tradeline during the previous six months. VantageScore may score you as long as your credit report has at least one account, even if the account is less than six months old.

The Score Ranges

The base FICO® Scores range from 300 to 850, while FICO’s industry-specific scores range from 250 to 900. The first two versions of the VantageScore ranged from 501 to 990, but the latest VantageScore 3.0 and 4.0 use the same 300-to-850 range as base FICO® scores.

The Importance of Different Credit Scoring Factors

The impact of a specific action on your credit scores depends on your overall credit profile and the scoring model. However, FICO® and VantageScore generally place similar relative levels of importance on the same types of information, such as payment history, credit usage, length of credit history, types of accounts, and recent activity.

How to Improve Your Credit Scores

There are many differences between VantageScore and FICO® credit scores, but all scoring models try to predict the same thing using the same underlying data. By focusing on building a good credit history, you can improve all your scores. One way to do that is to monitor your credit regularly.

For any mortgage-related needs, feel free to call O1ne Mortgage at 213-732-3074. Our team is here to help you navigate the complexities of credit scores and secure the best mortgage options available.

“`