FICO vs. Vantage Credit Scores
FICO® and Vantage are competing brands that produce consumer credit scores used to measure a borrower’s reliability in repaying a loan. Although credit monitoring sites often display VantageScores®, mortgage lenders almost exclusively use FICO® scores to determine loan eligibility and costs.
The Home.com study asked volunteer participants to compare their VantageScore® from a well-known credit monitoring site to their FICO® score from ScoreGenius™ from Home.com.
Fifty-four percent of participants had a VantageScore® higher than their FICO® score. Within this group:
- VantageScore® was 20 points higher on average
- The biggest difference was 73 points
- Seventeen percent had a VantageScore® 35 or more points higher than their FICO® score
How Credit Score Affects Mortgage Costs
Since FICO® scores are the benchmark in the mortgage industry, relying on an inflated VantageScore® to qualify for a home loan and mortgage rate can be problematic.
On a $300,000 loan with 15% down payment:
- A difference of 20 points between a 680 and a 660 score could mean either $3,750 in additional closing costs or an approximate amount $70– monthly increase in monthly mortgage payment based on Fannie Mae’s loan level price adjustment matrix.
- A difference of 73 points between a 720 and a 647 credit score could mean extra $8,250 in closing costs or around $140 per month on the mortgage payment.
- A difference of 73 points between a credit score of 651 and 578 could mean the difference between qualifying for multiple loan programs and being denied the loan.
These are a few scenarios where a homebuyer’s understandable overconfidence in their credit can lead to unwanted news when they apply to a mortgage lender.
Still, some homebuyers have a higher FICO® score than their VantageScore®, which could translate to the welcome surprise of more loan options and lower mortgage costs.
The survey asked 96 participants to report the difference between a popular online credit monitoring site’s VantageScore® and Home.com’s ScoreGenius™ score, which uses the FICO® Score 4 model used by lenders mortgages. Both platforms are free and use a “soft pull”, which means there is no damage to users’ credit scores. Home.com launched ScoreGenius™ in early 2022 as one of the first sites to give consumers a better picture of their mortgage creditworthiness with a free extraction of their FICO® score.
Check your FICO® score for free on ScoreGenius™.
Home.com is a multimedia resource for people who want to learn more about homeownership. Featuring news, articles, videos and social media content, Home.com aims to educate potential buyers before they embark on a major life decision. Home.com belongs to Fairway Independent Mortgage Company (NMLS #2289), a full-service mortgage lender with a wide range of products that help make home ownership more affordable. Situated at Madison, Wis.Fairway is committed to finding great mortgage options and providing our borrowers with some of the fastest turnaround times.