Credit scoring models: FICO, VantageScore, and others

By MoneyLion

We all know there are numerous credit reporting agencies that have different methods to come up with that magical number we call credit score, but is one credit reporting agency better than another? And how is it all calculated? We wanted to dispel the myths and rumors around your credit score and get straight to the facts.

How is my credit score calculated?

The formula to calculate your credit score is called a credit scoring model. There are a variety of factors that are input into each model’s formula (payment history, credit history, types of credit, etc.), and a weight is assigned to each factor. Scores can range from 300 to 850.

Which credit scoring model is the best?

There is much debate and speculation as to which credit scoring model is better, and the truth is no one model is better than the other. I know that sounds like something your elementary school teacher would say, but in this case it’s true. Each model has its strengths and can potentially be used for different purposes. Let’s explore some of those differences between the two most popular credit scoring models: FICO and VantageScore.


The FICO scoring model was established in 1989 and is probably the most well-known. The model is regularly revised, with the most recent revision being the FICO 9, which was released in 2014. There are five factors that influence a FICO score: payment history, credit utilization, credit history, types of credit, and new credit. FICO also provides industry-specific scores that are optimized for specific lending products, like a mortgage or auto loan.

How the FICO scorecard is weighted:

  • Payment history – 35%
  • Credit utilization – 30%
  • Credit history – 15%
  • Credit use – 10%
  • New credit – 10%

Payment history is the biggest factor when it comes to calculating your credit score. So be sure to pay those bills on time! At MoneyLion, we report MoneyLion Credit Builder Plus members’ loan payments to the credit bureaus to help them build credit history and improve their credit scores. That’s why nearly 70% of MoneyLion Plus members have increased their scores by an average of 30 points after joining.*

VantageScore model

The VantageScore model was released in 2006 and was created by the three major consumer credit reporting bureaus (Experian, Transunion, and Equifax). The model went through several versions before debuting the VantageScore 3.0 in 2013. The data that the VantageScore 3.0 looks at varies slightly from FICO 9. It examines things like on-time payments, low credit balances, new credit obligations, and bank account balances to calculate a final score. The VantageScore is considered by many to be a more consistent credit scoring model.

How the scorecard is weighted:

  • Payment history – 40%
  • Age and type of credit – 21%
  • Credit utilization – 20%
  • Total balances – 11%
  • Recent behavior – 5%
  • Available credit – 3%

Again, payment history is the largest factor impacting your score. Paying on time is a powerful way to take your credit score higher, no matter which scoring model is being used. MoneyLion gives you the ability to track and monitor your credit score in the app.

Differences between FICO and VantageScore

FICO and VantageScore are both important and useful models, but they do differ on a few factors. Firstly, FICO requires at least six months’ credit history and at least one credit account reported within the last six months. On the other hand, VantageScore only requires one month of credit history and one credit account reported within the last two years. If you’re new to credit, the VantageScore may prove to be more applicable.

FICO also penalizes all late payments equally, whether it’s a mortgage payment or a credit card payment. The VantageScore weighs late payments differently depending on the amount and importance of the payment. For example, late mortgage payments are penalized more harshly than late credit card payments.

What are other (rarely used) scoring models?


TransRisk was made to determine an individual’s risk on new accounts, as opposed to existing accounts, and is based on data from TransUnion. Although there isn’t a ton of information regarding how this score is calculated due to it being so specialized, it has been noted that a person’s TransRisk score is usually much lower than their FICO score.

Experian’s National Equivalency Score

Experian’s National Equivalency Score is slightly different from other credit scoring models in that it scores users on a scale from 0 to 1,000 based on payment history, credit length, credit mix, credit utilization, total balances, and number of inquiries. In Experian’s formula, a score of 100 means there is a 10% chance that at least one account will become delinquent in the next 24 months, while a score of 900 means there is a 90% chance of that happening. The lower your score, the better potential borrower you would be.

Insurance Score

Insurance companies also use credit scores to determine the risk of potential policyholders and the amount of their premiums. The insurance risk score ranges from 200 – 997 but can vary depending on the type of insurance.

There are other credit scoring models, including CreditXpert credit score and the CE (Community Empower) credit score.

MoneyLion Makes Credit Building Easy

Keeping track of your finances can be difficult. At MoneyLion, we make it easy by providing you with the necessary tools to stay financially healthy. A membership with MoneyLion Credit Builder Plus offers you anytime access to low APR loans.

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