Experian uses both FICO and VantageScore models, but lenders often pull different versions, so you'll see various scores (like FICO 8, VantageScore 4.0) based on your Experian report, with VantageScore being a common model offered free through Experian and FICO being the standard used by many major lenders.
Different services use different scoring models (FICO vs. VantageScore), and different versions of each scoring model to calculate your score based on the info in your credit reports. So it's possible that the variance is due to differences in the scoring models/versions being used by the services providing each score.
Furthermore, VantageScore 4.0 has a 0.5% greater predictive lift than Classic FICO and captures 7.5% more defaults. At a 620 credit score, 4.0 has a 6.5% lower default rate, “thereby reducing risk while expanding access.”
Confused about why your credit scores vary? 🤯 It's all in the details! VantageScore and FICO weigh factors like payment history and utilization differently. For example, payment history makes up 41% of VantageScore, while it's 35% of FICO. And utilization? That's 30% of your FICO score but only 20% of VantageScore. A.
Many lenders, including banks and mortgage providers, use VantageScore 3.0 to help determine approvals, loan terms and more. Your VantageScore may be different from your FICO ® score for a few different reasons, including the way in which your score gets calculated.
You may notice that your so-called Experian score is slightly different from your FICO Score. That's because both scores are based on different scoring models. FICO uses its own algorithm, while Experian's score uses both FICO and VantageScore.
The credit score used in mortgage applications
While the FICO® 8 model is the most widely used scoring model for general lending decisions, banks use the following FICO scores when you apply for a mortgage: FICO® Score 2 (Experian) FICO® Score 5 (Equifax) FICO® Score 4 (TransUnion)
Chase Credit Journey: VantageScore vs FICO
Chase Credit Journey uses VantageScore 3.0, which is a credit scoring model developed by the three major credit bureaus: Experian, Equifax ® and TransUnion ®. VantageScore 3.0 provides a snapshot of a consumer's credit health and behavior.
There is no official method of converting a Vantage Score to a FICO Score. Each scoring model uses different criteria and methods of pulling credit reports data; it's nearly impossible to convert. However, keeping both scores in mind can give you a much more well-rounded understanding of your credit reports health.
Your FICO score is a credit score — and you actually have more than one. If your FICO scores differ from other credit scores you see, it's likely because the scores you're viewing were calculated using a different scoring version or model. Those versions may have different information from each other.
By offering a free VantageScore 4.0 indefinitely, Experian is giving mortgage lenders time to evaluate the full benefit of VantageScore during the underwriting process. If Experian does charge, the company will offer VantageScore 4.0 for at least a 50% discount compared to what FICO charges for its score.
How do lenders calculate your credit score? Lenders will get a credit score from one of the UK's three credit reference agencies (CRAs) — Experian, Equifax and TransUnion. But they will also get the credit report that the credit score is based on.
A good Experian credit score, typically using the common FICO model (300-850), falls in the 670-739 range, while scores of 740-799 are "Very Good" and 800+ are "Exceptional," leading to better loan terms. For different Experian scoring models, like those used in the UK, a "Good" score might be 861-1000 (on a 0-1250 scale).
The 2-2-2 credit rule is a guideline for building strong credit, suggesting you should have two active credit accounts (like cards or loans) for at least two years, with consistent on-time payments for those two years, often with a minimum credit limit of $2,000 per account, to demonstrate financial responsibility to lenders, especially for mortgages. It's a benchmark to show you can handle credit well over time, reducing lender risk and improving approval odds for major loans.
For most people, increasing a credit score by 100 points in a month isn't going to happen. But if you pay your bills on time, eliminate your consumer debt, don't run large balances on your cards and maintain a mix of both consumer and secured borrowing, an increase in your credit could happen within months.
Experian is a credit bureau. Experian collects data about your financial data from lenders, credit card issuers, and other data furnishers to generate your credit report. So in a nutshell, FICO is just the “equation” used to calculate the information that Experian collects to determine your credit score.
Ways to improve your credit score
The primary reason for any discrepancy is that Credit Karma uses the VantageScore model, while most lenders use FICO scores. Additionally, Credit Karma doesn't include data from Experian, the third major credit bureau.
It's partly true: most negative items like late payments and collections are removed from your credit report after about seven years, but the underlying debt often still exists, and bankruptcies (Chapter 7) last 10 years, so your credit isn't entirely "clear" but mostly refreshed from old negatives. The 7-year clock starts from the date of the original delinquency, not when you paid it off or sent to collections, and the debt itself can still be pursued by collectors.
The 3-7-3 Rule in mortgages isn't a loan type but a federal timeline from the TILA-RESPA Integrated Disclosure (TRID) rule, ensuring borrower protection by mandating disclosures within 3 business days of application, a 7-business-day wait between the initial Loan Estimate and closing, and another 3-day wait if significant changes (like APR) occur, giving borrowers time to review costs before committing to a loan.