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The Two Credit Score Systems

The term “Credit Score” is a part of regular everyday life in our world. But where do credit scores come from and who sets the guidelines for these rating? There are two commonly used scoring systems that are in place to generate a credit score, FICO and Vantage Score.

FICO stands for the Fair Isaac Corporation which provides the scores used by most lending institutions in the US.  FICO has a general over all credit score that it provides for some lending products, but also contains specialized score for things like Auto loans, Mortgages and Credit cards. By having many options available for lenders to see  FICO remains the most popular score for banks.

In 2006 the three major credit Bureaus Equifax/Experian/Transunion created the Vantage score model. Their goal was to provide a more stable and uniform score that carried over from all the platforms. The Vantage score has become popular with many of the free credit monitoring apps like Credit Karma, Credit Sesame and Nerdwallet since it calculates just one score for each bureau instead of the 9 different models that FICO uses.  This allows Vantage to provide more generalized information to consumers, and breaks the score down into one simple number.