VantageScore (often shown on apps like Credit Karma) is usually higher than the FICO score (often provided by Experian) because they use different models to weigh credit data. Specifically, VantageScore is often more lenient on hard inquiries and may weigh credit utilization differently.
Because FICO and VantageScore weigh credit factors differently, a consumer's scores can vary between the two models. This could potentially mean that you qualify for credit with one score but not the other.
Data differences
Not all lenders report to all three credit bureaus. Some might send updates to TransUnion and Equifax but ghost Experian entirely. So if you've got a positive payment streak that only TransUnion knows about, that explains why your Experian credit score feels like the odd one out.
A recent FICO study claims that FICO 10T outpaces VantageScore 4.0 when it comes to assessing creditworthiness.
This is likely the main culprit. Usually when you see such a large discrepancy between VantageScore and FICO, it's due to revolving utilization. VantageScore tends to be highly sensitive to utilization whereas FICO can see a decent CC usage before seeing significant score changes.
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.
Yes, you can likely get a $50,000 loan with a 700 credit score, as this falls into the "good" credit range (670-739) that unlocks better rates, but approval also hinges on your income, debt-to-income (DTI) ratio (ideally below 36%), and overall credit history, with lenders looking for stability and repayment ability, so prequalifying with multiple lenders helps compare terms.
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.
The reality is that VantageScore 4.0's predictive performance power and default identification remain consistent, stable, and superior, no matter the method of mortgage credit score aggregation for the tri-merge.
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.
Lenders don't rely on your ClearScore credit score, or any one CRA score, to make decisions. When you apply for credit, lenders view your credit report data and use their own internal scoring system to assess risk and affordability.
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.
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.
Have you seen both of your scores and questioned, “Why is my VantageScore® different than my FICO® Score?” It's because there are differences in how each company weighs categories and information within their own scoring models. This can result in slightly different scores.
A “good” to “excellent” credit score—the typical $200K loan credit score is 700 and above. Some lenders may approve scores in the 660 to 699 range, but with less favorable terms.