What is the Difference between VantageScore 4.0 and Classic FICO Scores?

VantageScore 4.0 and the Classic FICO® scoring models use different criteria to calculate consumer credit scores. While both consumer credit scores use a 300-to-850 score range and evaluate similar information from consumer credit reports, they differ in how they weigh certain factors and what data they include.

Using industry standard measures to assess predictive value, VantageScore 4.0 consistently outperforms benchmark models. VantageScore 4.0's predictive performance power and default identification remain consistent, stable, and superior, no matter the method of mortgage credit score aggregation for the tri-merge. Additionally, VantageScore 4.0 enables lenders to increase financial inclusion by accurately assessing approximately 33 million more consumers than other commercially available credit score models.

According to Dr. Andrada Pacheco, EVP and Chief Data Scientist at VantageScore, “Even when using the "tri-merge median" method (middle of the three bureau scores comparison), VantageScore 4.0 still outperforms Classic FICO for high-risk loans entering the stress environment of the pandemic (2019 originations with FICO ≤ 720), capturing a relative 8.1% more defaults in the riskiest decile, with a +40.8% lift in Gini value and +34% lift in KS test. This is clear evidence that the VantageScore 4.0 model better isolates high-risk borrowers ahead of the pandemic. This also underlies our conclusion that the VantageScore 4.0's model performance and not the aggregation formula for the tri-merge drives the superior VantageScore outcome.”

To promote credit scoring competition and support consumers and the Mortgage industry, Equifax has announced that they will offer VantageScore® 4.0 mortgage credit scores at an over 50% reduction from FICO score 2026 prices, or $4.50, through the end of 2027. Equifax will also offer free VantageScore 4.0 credit scores to all Equifax mortgage, automotive, card, and consumer finance customers who purchase FICO scores from Equifax through the end of 2026. 

The key differences between VantageScore 4.0 and Classic FICO scores include:

• Credit History Requirements: VantageScore 4.0 can generate a score with as little as one month of credit history and can also use "trended data" and "alternative data," such as rent, utility, and telecom payments, to enhance the assessment of creditworthiness. It was the first credit score to incorporate these factors, with a goal of expanding access to credit for millions more Americans. Classic FICO typically requires at least six months of credit history with an active account. 

• Data Analysis: VantageScore 4.0 uses trended credit data, which reflects changes in credit data over time, instead of relying on the static, point-in-time credit history records leveraged by conventional FICO credit scores. These deeper insights have proven to provide a 20% lift in originations without adding incremental risk – enabling greater mainstream financial opportunities for more people. Classic FICO provides more of a snapshot of an individual’s credit utilization at a specific point in time.

• Collection Accounts: VantageScore 4.0 does not factor in paid collection accounts and ignores unpaid medical collections. Classic FICO may ignore paid collections and also disregards smaller collection accounts with an original balance under $100.

• Hard Inquiries: Both models have a grace period for multiple hard inquiries for the same type of loan, counting them as a single inquiry. The grace periods differ, with Classic FICO using a 45-day window for auto, student, and mortgage loan inquiries, while VantageScore 4.0 uses a 14-day window and applies it to more types of credit, including credit cards.

VantageScore is the fastest growing credit scoring company in the U.S., developing the industry's most innovative, predictive, and inclusive credit score models. More than 3,700 institutions, including nine of the top 10 U.S. banks, use VantageScore credit scores to provide consumer credit products like credit cards, auto loans, personal loans and mortgages. By providing a fair and accurate credit score to a broader population, VantageScore creates opportunities for lenders to extend credit safely and soundly to consumers historically underserved by legacy processes.

There are many differences between VantageScore credit scores and FICO® credit scores, and each companies' various credit scoring models. Equifax encourages all consumers to understand how credit scores are calculated as well as monitor their credit regularly. 

FORWARD-LOOKING STATEMENTS

This article contains certain forward-looking information to help you understand Equifax and its business environment. All statements that address operating performance and events or developments that we expect or anticipate will occur in the future, including statements relating to the pricing strategies, potential benefits and value propositions of product offerings of Equifax and its competitors, are forward-looking statements. We believe these forward-looking statements are reasonable as and when made. However, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in our 2024 Form 10-K and subsequent SEC filings. As a result of such risks and uncertainties, we urge you not to place undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.