In March 2006, all three credit bureaus announced the use of a new credit scoring system called VantageScore. It was to combat the industry giant Fair Isaac and his scoring model, the FICO score. The VantageScore came out with much anticipation, but that was primarily in the minds of the media and consumers, not the creditors who will extend the credit.

One difference is the credit score scale. The FICO score uses a credit score scale that starts at 300 and goes up to 850. VantageScore uses a credit score scale that starts at 501 and goes up to 990. The FICO scale is large with a range of 550 compared to the Vangtage range. of 489 Credit bureaus also assign a grade with their credit rating scale.

501-600 F credit rating
601 – 700 D credit rating
701 – 800 C credit rating
801 – 900 B credit rating
901 – 990 A credit score

Using this, the intentions were to assign a grade to it. There are a limited number of classes that use the VantageSore credit table. FICO scores have several different levels and further dissect the population compared to the VantageScore.

Also, there could be variations in your score depending on the credit scoring scale used. You may have a good credit rating with Fair Isaac, but a “C” when using VantageScore.

The differences influence how the score is calculated. With the FICO score, five different variables are used to formulate your FICO score. With VanatageScore, there are six, and the one not included in the FICO score is available credit. It is not a major factor in your FICO score, but a part of the other five.

The two different credit score scales have most of the same methodology, but a few things are different. It’s hard to say what carries more wait in different areas and it’s even harder to determine because both formulas are not disclosed to the public.

The credit bureaus have a lot of work ahead of them if they want to take over even a small percentage of the credit rating market. Fair Isaac has been in this business since the 1950’s and is seen as the standard. Another factor to consider is the use of the FICO score in mortgages. Since this is the standard and mortgages are sold in clusters on a secondary market, it will be a long and difficult battle to switch to VantageScore.