A battle of the titans is shaping up in the world of credit-scoring. FICO, the big fish in the industry, is facing growing competition from a rival scoring system, VantageScore.
VantageScore is gaining
VantageScore was launched in 2006 by VantageScore Solutions, a joint effort of the three largest U.S. credit-reporting agencies, Experian, TransUnion and Equifax. Before that the 60-year-old FICO (previously called the Fair Isaac Corp.), inventor of credit-scoring, had the field pretty much to itself.
FICO still does dominate. Its scores are used in 90 percent of lending decisions in the United States, FICO says.
Increasingly, though, VantageScore is accepted too. Its use grew sixfold between 2012 and 2015, according to Yahoo Finance. “VantageScore is already being used for some auto loans, credit cards and mortgages, and is gaining wider acceptance,” NerdWallet says. And an impressive roster of government and industry databases has embraced VantageScore. …
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