What Are the Differences Between VantageScore vs. FICO Credit Scoring Models?
When you apply for a mortgage, your credit score plays a significant role in whether you get approved. It also affects your interest rate and how much you can borrow.
Most lenders today use FICO scores to make these decisions, which have been the standard for years. This started to change on July 8, 2025, when the Federal Housing Finance Agency (FHFA) gave an order to start allowing Fannie Mae and Freddie Mac to officially allow lenders to qualify homebuyers for mortgages using VantageScore 4.0.
When this change is officially in place, your credit score might open more doors than before. In this blog post, we’ll explain how FICO and VantageScore calculate your credit score, what makes those scores different, and how the update could improve your ability to get a mortgage.
What is FICO?
FICO is a type of credit score created in the 1980s. The most recent version is FICO® 10. It looks at how you’ve handled money in the past, including:
- Whether you’ve paid bills on time
- How much debt you have
- How long have you had credit
- How often you apply for new credit
- The mix of credit accounts that you use
FICO needs at least six months of credit history to give you a score. It also tends to weigh medical debt in the same way as other types of debt.
What is VantageScore?
VantageScore is another scoring model, developed by the three major credit bureaus, Experian, Equifax, and TransUnion. It uses similar factors to FICO but weighs them differently. You may see your VantageScore when you check your credit through a personal finance site, credit card app, or bank.
The newest version, VantageScore 4.0, focuses more on recent activity and aims to predict future behavior more accurately based on current financial habits.
VantageScore 4.0 can generate a score with as little as one month of credit history. It also factors in rent and utility payments if reported to the credit bureaus. That means more people can get a credit score, even if they haven’t used credit cards or other types of loans in the past.
The Credit Score Ranges
Understanding your credit score is a big part of the home financing process. Lenders use credit scores to decide if you qualify for a loan and what interest rate you’ll receive. But not all credit scores are the same. The two most common scoring models are FICO and VantageScore, and each one uses slightly different labels and ranges.
VantageScore 4.0 Credit Score Ranges:
- Subprime: 300–600
Borrowers in this range may have difficulty qualifying for most loans and often face higher interest rates.
- Near Prime: 601–660
This range signals some past credit issues but may still qualify for certain loan programs, especially with compensating factors.
- Prime: 661–780
Most lenders view scores in this range favorably, which typically leads to better loan options and rates.
- Superprime: 781–850
The best possible range, where borrowers get access to the lowest interest rates and most favorable terms.
FICO Score Ranges:
- Poor: 300–579
Borrowers in this range are seen as risky and may struggle to qualify for loans.
- Fair: 580–669
Some loan programs are available, but interest rates are usually higher.
- Good: 670–739
Most lenders consider this a solid score, opening the door to more options and better rates.
- Very Good: 740–799
Borrowers in this range are likely to be approved and qualify for attractive rates.
- Exceptional: 800–850
This is the highest credit tier, where you’ll find the best loan terms and lowest interest rates.
Knowing which category your score falls into can help you set realistic expectations as you start the home financing journey. No matter where you are today, there are steps you can take to build and improve your credit over time.
What Are the Main Differences Between VantageScore vs. FICO?
While both FICO and VantageScore use a credit score range of 300 to 850, they calculate your score in different ways. Understanding these differences is key, especially if you’re applying for a mortgage or trying to improve your credit. Lenders may use either model depending on the loan program, and the score they see could impact your loan approval and interest rate.
VantageScore 4.0 is a newer model that puts more weight on recent behavior and expands access to people with thinner credit histories. FICO, on the other hand, is more widely used by lenders and has been the industry standard for decades. Each model considers similar factors, like payment history and credit utilization, but weighs them differently and uses different data rules.
Here’s a quick comparison to help you see how they stack up:
| Feature | FICO® 10 | VantageScore 4.0 |
|---|---|---|
| Uses rent and utility data | Rarely | Yes |
| Needs 6 months of history | Yes | No |
| Weighs medical collections | Heavily | Less impact |
| Updates scoring model | Slowly | More often |
| Credit score range | 300 to 850 | 300 to 850 |
Why is This Good News for Buyers?
This proposed update from Fannie Mae and Freddie Mac is a big deal. More people may qualify for a conventional home loan thanks to VantageScore 4.0, depending on their individual credit. It helps:
- First-time buyers
- People with shorter credit histories
- Renters with strong payment records
- Those recovering from past financial issues
Lenders now have the option to use a credit model that sees the whole picture, not just your past mistakes. VantageScore Solution’s 2025 research estimates that approximately 2.7 million new mortgages, worth around $1 trillion in loans, may become possible.
Even though VantageScore 4.0 is gaining traction, FICO scores are still widely used in the mortgage industry. Most lenders continue to rely on FICO, especially for traditional loan programs, and that’s not expected to change overnight.
It’s a good idea to ask your loan officer which credit scoring model will be used for your application. They can walk you through what your score means, what factors are being considered, and how to put your best foot forward when applying for a loan.
What Can You Do Today?
Even with these changes, the basics still matter. Here’s how to stay on track:
- Pay all your bills on time
- Limit new credit applications
- Keep your credit balances low
- Check your credit report for mistakes
- If you rent, look into reporting your payments
Your credit score is just one part of the mortgage process, but now it might tell a more complete story.
This change will bring more opportunities to more people, and we’re excited to help guide our clients through it.
If you’re planning to buy a home or want to understand how your credit score affects your options, contact a First Heritage Mortgage loan officer today. We’ll help you understand your options and find the best path forward.
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