What Are the Different Credit Scoring Models?

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credit scoring model

Credit scoring models are used to calculate credit-worthiness, which is the likelihood you can and will repay your debt. While all credit scoring models work with the same factors, they weigh averages differently, meaning that each credit scoring model might give you a different credit score. 

But which credit score is the most important? And which one will your bank use for a mortgage? The short answer is that you’ll want to have an idea of your credit score according to two main credit scoring models, which are Fico and VantageScore. 

The financial habits that will improve one score will improve both, so using MoneyLion’s financial tools can help you achieve a higher credit score very quickly. Beyond that, we’ll help you better understand how your credit score is calculated and what you can do to improve it. With these facts in mind, you’ll be able to understand your credit score and start improving it. 

How is my credit score calculated?

Your credit score is calculated as a weighted average of factors like payment history, credit usage, and the age of your oldest credit line. The score is then expressed on a scale from 300 to 850, where 850 is over-the-top exceptional but anything above 740 is considered very good. Average credit scores vary by age, but the national average across all age groups is currently 711

Which credit scoring model is the best?

Each credit score will be used for different purposes. While many banks prefer the FICO score, others will elect to use the VantageScore or Experian models instead. 

All three credit scoring models are updated simultaneously and they also use the same information when coming up with your score, so your best bet is to work on improving all three scores at once. 

In order to better understand how credit scores are calculated, let’s explore the two most popular credit scoring models, which are FICO and VantageScore.


The FICO scoring model is probably the one that people understand the most, and sometimes, FICO is even used interchangeably with the term credit score. The FICO model has been regularly updated since its origination back in 1989, and the latest revision, called FICO 9, was released in 2014. 

FICO also provides industry-specific scores for specific products, like mortgages or auto loans. The five factors that influence your FICO score are payment history, your credit utilization, credit history, types of credit, and new credit. 

Each of these factors will have a different weight when it comes to your overall total score. For instance, your payment history has the greatest weight when calculating your FICO credit score. 

Here is what comprises the FICO scorecard:

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

Like we mentioned, your payment history is the biggest factor when it comes to calculating your credit score. So, make sure you pay your bills on time! 

At MoneyLion, we’ll even report MoneyLion Credit Builder Plus members’ payments to the three major credit bureaus as a way of helping them build credit history and improve their credit scores in the long run. That’s why nearly 70% of MoneyLion Plus members have increased their scores by an average of 30 points after joining the program. 

You can also take advantage of MoneyLion’s Instacash feature to help you make on-time payments, even when cash is tight or money is low. 

VantageScore model

The VantageScore credit scoring model was released in 2006. It was created by the three major consumer credit reporting bureaus, which are Experian, Transunion, and Equifax. 

The current version, which is known as VantageScore 3.0, has been used since 2013. You’ll notice that your VantageScore might be higher or lower than your FICO score. This is because VantageScore weighs the variables differently than FICO does.  

VantageScore takes on-time payments, low credit balances, new credit obligations, and bank account balances into account when calculating the final score. The VantageScore is considered by many to be a more consistent credit scoring model.

Here’s what VantageScore takes into consideration: 

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

Just like the FICO scoring model, the largest factor impacting your VantageScore credit score is your payment history. Paying on time is a powerful way to increase your credit score, no matter which scoring model you’re looking at. 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 useful credit scoring models, but they do differ in a few ways. The primary difference between FICO and VantageScore is the weight placed on various factors when calculating the total score. 

VantageScore gives greater weight to payment history, age, and the type of credit. Those variables account for 61% of the total score. In contrast, FICO attributes 35% to payment history, 10% to new lines of credit, and 15% to credit history. 

While the total of these three factors is still 60%, the way it is calculated can affect your total score. FICO also penalizes all late payments equally, whether it’s a mortgage payment or a credit card payment. 

The VantageScore, on the other hand, weighs late payments differently depending on the amount and the importance of the payment. For example, late mortgage payments are penalized more harshly than late credit card payments

In addition, FICO requires at least six months’ worth of credit history and at least one credit account that has been reported within the last six months. On the other hand, the VantageScore model only requires one month’s worth 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 useful for you.

Alternative scoring models


TransRisk was made to determine an individual’s risk on new accounts, as opposed to existing accounts, and it is based on data from TransUnion. TransRisk scores are calculated on a scale from 330 to 830. A person’s TransRisk score is usually much lower than their FICO score. If you work to improve your FICO score and your VantageScore, you won’t need to worry about your TransRisk 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. The score is based on the payment history, credit length, credit mix, credit utilization, total balances, and a number of inquiries in your name. 

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 your potential return for the lending institution. But the motto of the lower the score, the better is applicable to this score only. 

Insurance Score

Insurance companies use credit scores to determine the risk of potential policyholders and the amount they should pay as their premiums. The insurance risk score ranges from 200 to 997, though it can also vary depending on the type of insurance you are after. Many insurance companies will also use FICO scores or VantageScores, along with personal history, to calculate a borrower’s insurance risk. 

FICO Auto Score

The FICO Auto Score option calculates the specific risk of borrowers for automobiles and vehicles. The difference between your FICO 9 Score and your FICO Auto Score is how much weight is placed on your credit history as it relates to auto products. While anything about 700 is considered good, the lending institution you want to borrow from will decide what your minimum FICO Auto Score must be before they will loan money to you. 


CreditXpert is a credit-improvement platform made for individuals who want to get a mortgage. The platform simulates credit scores for mortgage applicants and identifies opportunities where they can improve their credit scores or seek out even better mortgage opportunities. 

Community Empower (CE) 

Community Empower is a completely free credit score opportunity that uses the VantageScore credit scoring model. Your CE credit score will be broken down in the following way: 

  • Credit Utilization – 30%
  • Payment history – 20%
  • Cash Flow – 15%
  • Credit Balances – 10%
  • Types of Credit – 10%
  • Available Credit – 5%
  • Length of Credit History – 5%
  • New Credit – 5%

Quickly Improve Credit Scores with MoneyLion

Whether you choose to focus on the FICO scoring model or the VantageScore credit scoring models, remember that they are a reflection of your overall financial health. If you pay your debt back on time, manage your total debt, make sure you don’t open too many new accounts at once, and have credit diversity, that will be reflected in your credit scores. 

Keeping an eye on your scores on a regular basis can be a great way to ensure that there are no mistakes on your credit report. MoneyLion has the tools you need to take control of your finances. 

These tools include MoneyLion’s personal banking app, which offers app features to track your credit score. There’s also MoneyLion’s Instacash, which can give you money to build credit or when you need some fast cash. Also, consider signing up for the MoneyLion Credit Builder Plus membership. You can quickly improve your credit score while obtaining lower interest rates and better loan opportunities as well.

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