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Know the Difference Between FICO and Vantage

Check your credit! Make sure you check your credit at least once per year! And that’s very sound advice. Consumers should check their credit report at least once per year and they should look for mistakes. They should also take at current credit balances compared to credit limits as well. Why? Well, in today’s credit world, credit scores are the harbingers of a loan approval or not. Yet a credit report and credit scores are two different things entirely. Connected, yes, but different still.

When a mortgage company orders a credit report, it receives the report which lists, line item by line item, each credit account both current and closed, payment history, loan balances and any negative information. The thing consumers need to know is payment history is the biggest contributor to credit scores. As a mortgage company looks at a credit report, it will look at these items. In addition, certain public records will be accessed for things such as tax liens and judgments. But over the years, it’s the credit score that is the main “decider.” Did you know there are two different credit scores as it relates to mortgage qualifying?

Yes, there are. There is what is referred to as a Vantage score and a FICO score. The three main credit repositories of Equifax, Experian and Transunion report both. This is a three digit number ranging from 300 to 850. The higher the score, the better the credit. At least according to the scores. The advice consumers get regarding checking their own credit is solid, but consumers only have access to the Vantage score, not FICO. FICO is the one mortgage lenders use, not the Vantage score.

New credit customers will likely have a Vantage score but not a FICO score. FICO needs at least six months of credit history and at minimum one account being reported to the credit agencies. Further, FICO treats all late payments the same, whether they were made more than 30, 60 or 90 days past the due date. Vantage frowns on these payments more than FICO. If you’ve pulled your own Vantage score and subsequently applied for a mortgage loan, the scores will be slightly different. Similar, but rarely the same.

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