What Is a VantageScore Used For?

By: Bob Musinski
Date: February 15, 2019

What Is a VantageScore Used For?

VantageScore creates a credit profile for users, making it useful for anyone beginning to build a credit history. (Getty Images)

When you check your credit score on a website, through a credit card company or with a lender, you might not know what company produced that score.

It’s likely the score is from one of two sources: FICO or VantageScore. While FICO is the better known of the two, many consumers – whether they know it or not – are getting scores from VantageScore, which is often used by credit card companies and websites that offer your credit score for free.

Here is a look at what VantageScore is and why you might find it useful as you keep tabs on your credit.

What Is VantageScore?

The VantageScore model was developed in 2006 by the three national credit reporting companies – Equifax, Experian and TransUnion – as an alternative to the more established FICO scores. FICO scores, which were created by the Fair Isaac Corp., started in 1989 and are used by 90 percent of top lenders.

The VantageScore system was designed to provide a consistent credit scoring model that could be used by all three credit bureaus. It also aimed to expand the number of people who receive credit scores, including college students and recent immigrants, and others who might not have used credit or use it sparingly, says Jeff Richardson, vice president and group head of marketing and communications for VantageScore Solutions.

Credit expert John Ulzheimer, who formerly worked for Equifax and FICO and has written for VantageScore’s newsletter, says it’s important to have a scoring system that is competitive with FICO.

“The financial services environment operated with only one choice in tri-bureau credit scoring systems for decades,” Ulzheimer says. “That meant an overwhelming majority of decisions about our applications were influenced by one scoring company – FICO. Giving lenders a second, equally effective option allows them to test the efficacy of scoring models and upgrade, if warranted, and price credit products more accurately.”

In addition, Ulzheimer credits VantageScore for creating the free credit score market.

“Before FICO started allowing credit card issuers to give away their scores to their customers, VantageScore was the only noneducational credit score being given to consumers on a large-scale basis,” Ulzheimer says.

Who Uses VantageScore?

A variety of financial and nonfinancial institutions use VantageScore. About 10.5 billion VantageScores were used between July 2017 and June 2018, with 4.4 billion of those involving credit card issuers, according to a VantageScore Solutions market study released in 2018.

Financial institutions often used the score for issuing lending products such as credit cards and auto loans. The 2018 report showed eight of the 10 largest banks used the scores in one or more lines of business. Nonfinancial institutions such as consumer websites, utility companies and government entities used VantageScore for credit screening checks before a rental or purchase or to share directly with consumers.

VantageScores are used by:

Credit card issuers

Personal and installment loan companies

Auto lenders

Mortgage lenders

Credit unions


Tenant screening, telecommunications and utility companies

Consumer websites

Government entities

How VantageScore Can Help People New to Credit

The VantageScore model is designed to make it easier for consumers to build credit scores. VantageScore uses data such as rent, utility and telecom billing information; public records; and older credit file information to develop a profile of consumers.

Also, your credit history will be recognized more quickly with VantageScore because it will look at the first month of reported credit activity, Richardson says. FICO requires that an account be open for at least six months before issuing a score.

However, FICO officials are skeptical of VantageScore’s ability to provide an accurate credit score after such a short period of time.

“I would suggest the one-month history, from our perspective, has proven analytically insufficient to build a quality score,” says Joanne Gaskin, senior director of scores and analytics at FICO.

What Influences VantageScore

There are a variety of VantageScore and FICO versions in the marketplace, as both companies are continually updating their analytical models. But the basic scoring systems are fairly consistent, and the scores are primarily based on the credit history contained in consumers’ credit reports.

VantageScore breaks down the various influences on a consumer score this way:

Extremely influential: Payment history. In fact, 90 percent of people with a “prime” VantageScore – between 661 and 780 – pay all their debts on time.

Highly influential: Age and type of credit, which means that using a variety of accounts over time, such as credit cards and auto loans, can improve your score. Percentage of credit used is also highly influential. VantageScore urges consumers to keep their revolving balances under 30 percent of the total credit line.

Moderately influential: Total balances and debt, which rewards consumers who keep debt levels low.

Less influential: Recent credit behavior, which means consumers who open many credit accounts in a short period of time can be penalized.

Least influential: Amount of credit available, which rewards people who use only the amount of credit they need.

Although the factors that contribute to the FICO score are similar to VantageScore and both systems’ scores range from 300 to 850, “we weight different behaviors differently,” Richardson says. “These are two very different models. It’s the same data, but we interpret it in different ways.”

What VantageScore 4.0 Measures

VantageScore’s most recent version, 4.0, relies on data from credit bureaus that might show trends in consumer activity.

For example, if a consumer has high credit card balances around the holidays and pays them off every year, it’s important to not let the credit score be unduly influenced by that one month’s activity, Richardson says. Instead, the score looks at a longer time frame to see how the behavior is distinctive from someone who has high credit card balances all year. Also, if consumers pay double the amount owed on their monthly auto loan payment, for example, they can be rewarded for that behavior.

The data let VantageScore be more predictive, allowing people new to credit to have an opportunity to get a higher score than they would have otherwise, Richardson says.

How to Use VantageScore

Knowing your VantageScore can help you understand what lenders consider when making credit decisions. VantageScores are available on free websites and through many lenders. There can be a disconnect between the scores you can obtain for free and the ones your lender is using, however. For example, mortgage lenders are required to use a version of the FICO score almost exclusively.

Regardless of the score you’re relying on, the factors are somewhat similar. That’s why the score you’ll find on a free website or through a credit card company shouldn’t be dramatically different from one used for an auto loan or mortgage.

“Make sure you make your payments on time, keep utilization relatively low, do not go out shopping for credit you don’t need, and over time your score is going to be pretty high for all these models,” Richardson says.

Understanding Your Credit Score

VantageScore offers a few resources to help consumers understand what influences their credit score:

YourVantageScore.com presents stories, videos and infographics to help consumers understand how they are scored and how to improve their score.

ReasonCode.org helps consumers understand why their credit score isn’t as high as they might like. The website allows you to insert codes found in disclosure statements and get more information on what might be weighing down scores.

CreditScoreQuiz.org is a partnership between VantageScore and the Consumer Federation of America that helps consumers learn more about credit scoring. It’s offered in English and Spanish.