FICO might be the best-known credit score, but it’s no longer the only one lenders rely on. In fact, VantageScore is gaining ground fast. More than 3,000 lenders now use it—including major names like Capital One, American Express, and SoFi—and that number keeps growing.
If you’re applying for a credit card, mortgage, or personal loan, there’s a good chance your lender could be looking at your VantageScore instead of your FICO score. That’s why it pays to understand how VantageScore 4.0 works, how it’s calculated, and what you can do to improve it.
Let’s break it down.
What is VantageScore, and why does it matter?
VantageScore is a credit scoring model developed by the three major credit bureaus—Equifax, Experian, and TransUnion. It gives lenders a way to assess how likely you are to repay a loan or manage a credit card responsibly.
While FICO has been around longer, VantageScore is catching up. More lenders are using it, especially for people who don’t have a long credit history. It works similarly to FICO in many ways, but there are some key differences that make it more inclusive and potentially more favorable to certain borrowers.
If a lender pulls your VantageScore instead of your FICO score, it could change your loan terms—or whether you get approved at all.
How VantageScore 4.0 Calculates Your Credit Score
VantageScore 4.0 uses a 300 to 850 credit score range, just like FICO. But it weighs each factor differently. Here’s how your VantageScore is calculated:
- Payment history – 41%: Your record of on-time or late payments carries the most weight. A single late payment—especially 30 days or more—can do serious damage.
- Credit age and mix – 20%: This includes how long your credit accounts have been open and the types of credit you use. A mix of revolving credit (like credit cards) in addition to installment loans. works in your favor.
- Credit utilization – 20%: This refers to how much credit you’re using compared to your limits. Lower is better—especially under 30%.
- Recent credit behavior – 11%: Applying for too many credit accounts in a short time can signal risk. Hard inquiries and new accounts can drag your credit score down.
- Total debt – 6%: The model considers how much you owe across all accounts. Less debt means less risk from a lender’s perspective.
- Available credit – 2%: Having more unused credit can give your credit score a slight bump. One way to help is by asking for a credit limit increase without increasing your spending.
Key Differences Between VantageScore and FICO
Both VantageScore and FICO use similar data, but they process that data differently. Here’s how they compare:
- Scoring range: Both use 300 to 850 now, but VantageScore didn’t always.
- Minimum requirements: FICO usually requires at least six months of credit history. VantageScore may generate a score with just one month of activity, as long as there’s been a credit update in the last two years.
- Collections: Paid collections are ignored under VantageScore 4.0. FICO 8 still counts them, although newer versions like FICO 9 and 10 also ignore them.
- Small collections: VantageScore ignores collections under $250. FICO doesn’t have a set dollar threshold.
- Trend data: VantageScore 4.0 uses trended data, which means it looks at how your balances change over time—not just your current snapshot.
These differences make VantageScore more forgiving for people with limited or inconsistent credit activity.
Who uses VantageScore 4.0 today?
More lenders and service providers are turning to VantageScore to make credit decisions. It’s especially common with online lenders and credit monitoring platforms.
Some of the companies using VantageScore include:
- American Express
- Capital One
- Credit Karma
- LendingTree
- SoFi
- Synchrony Bank
- Upstart
- USAA
In addition to lenders, landlords, insurance companies, and utility providers may also use VantageScore to evaluate risk.
Who benefits most from VantageScore?
VantageScore is designed to score more people—including those with thin or limited credit files. In fact, it can generate credit scores for about 30 million people who might be “unscorable” under FICO.
That includes:
- People who don’t use credit often
- New credit users with little history
- Borrowers recovering from financial setbacks
- Consumers with paid or low-dollar collections
By using more recent data and ignoring smaller collections, VantageScore gives these groups a better chance at qualifying for loans and credit cards.
How to Check Your VantageScore for Free
You can check your VantageScore in a few different ways—no payment required:
- Credit card issuers: Some banks, like Capital One and American Express, show your VantageScore in your online account.
- Credit monitoring sites: Credit Karma and LendingTree both show VantageScore 3.0 from TransUnion or Equifax.
- Loan applications: Some lenders disclose your score after you apply, especially for personal loans or auto loans.
Just keep in mind that the version you see may vary. Lenders may use VantageScore 3.0 or 4.0 depending on their system.
7 Ways to Raise Your VantageScore Fast
Improving your VantageScore isn’t complicated, but it does take consistency. Here’s what works:
- Pay every bill on time: Even one late payment can hurt your score for years. Set up autopay or reminders to stay on track.
- Keep your credit card balances low: Try to stay under 30% of your credit limit. Under 10% is even better if you’re aiming for a top-tier score.
- Avoid unnecessary credit applications: Each hard inquiry can drop your score a few points. Only apply when you truly need new credit.
- Ask for a credit limit increase: A higher limit can lower your credit utilization ratio—without taking on new debt.
- Keep old accounts open: The longer your credit history, the better. Don’t close old credit cards unless there’s a good reason.
- Add different types of credit over time: Having both installment and revolving accounts shows you can handle multiple kinds of debt.
- Pay down existing debt: The less you owe overall, the stronger your credit profile looks to lenders.
Final Thoughts
VantageScore 4.0 is being used by more lenders, it scores more people, and it gives you credit for positive trends that FICO might overlook.
If you’re working to build or rebuild credit, VantageScore gives you a real shot at qualifying for better interest rates, higher credit limits, and faster approval. Knowing how it works—and taking steps to boost your score—can open the door to more financial opportunities.
