Experian, as a major credit bureau, provides scores using both FICO and VantageScore models, but they are distinct; your Experian score might be a VantageScore (especially when getting it free from them) or a specific FICO score (like FICO 8 or 9 for various lenders), as they create their own versions of FICO scores too, with VantageScore being a joint creation of the three bureaus to compete with FICO.
VantageScore and FICO score are widely used credit scoring models. Experian is one of the three main credit bureaus in the U.S. and uses both credit scoring models.
The ``Vantage'' score is based on your Transunion Credit Report. American Express provides their card members with a ``FICO 8'' score based on your Experian Credit Report. This could be the reason for the large discrepancy. The credit bureaus act independently of each other, so often they don't line up.
AEI concluded that both VantageScore 4.0 and Classic FICO are effective in identifying high-risk loans, with only marginal differences between the two. “The reported advantages of VantageScore 4.0 largely disappear once two major methodological flaws are corrected,” AEI stated.
Is Experian or FICO more reliable? Your VantageScore and your FICO Score are two different credit scores that use two different credit models. Both are considered to be reliable.
Score versions
Don't forget, there's more than one version of a FICO score. There's FICO 8, FICO 9, FICO Auto Score — you get the picture. So even if two bureaus both use Experian data, they might still use different versions of the scoring model. No wonder you're asking why are Experian scores lower!
However, most mortgage lenders use FICO scores. Your score can differ depending on which credit reporting company is used, but most mortgage lenders look at scores from all three major credit reporting companies – Equifax, Experian, and TransUnion – and use the middle score for deciding what rate to offer you.
Both FICO and VantageScore models analyze similar categories of information from your credit reports to generate a credit score. However, each model assigns a different level of importance, or weight, to these factors. This is a primary reason why your scores from each model may be different.
VantageScore weighs payment history more heavily than FICO. For example, payment history composes 40% of Vantagescore 3.0 while it makes up only 35% of FICO Score 8. Depending on your credit behavior and how timely you make your payments, your scores could vary.
Lenders use both FICO and VantageScore, with FICO traditionally dominating, especially in mortgages, but VantageScore gaining significant ground, particularly with recent approvals for use in loans backed by Fannie Mae and Freddie Mac (GSEs). Many lenders use different scores for different products, and some even have their own proprietary models, so it's best to ask your loan officer which score they'll check.
Why has the top score increased from 999 to 1250? The score has been expanded to give you a clearer picture of the new information that banks and lenders now use to make decisions. Things like rent, overdrafts, and mortgage overpayments.
Different Credit Reports
As a result, the same scoring model could give you different credit scores based on each of your three credit reports. Example: Your FICO® Score 8 based on Experian data likely differs from your VantageScore 3.0 based on TransUnion data.
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.
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.
Improving your VantageScore
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.
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.