Many incorrectly believe as long as your Credit Karma (Vantage) and other consumer scores go up, your FICO Scores improve. That seems to make common sense. However, in a U.S. government survey, it was determined that Vantage Scores go up quite often while FICO scores go down. It has been documented many times to see there are substantive differences that show Vantage Scores improving while FICO scores decline, and vice versa. This issue makes the Vantage Score and other consumer credit score models unreliable for consumers.
How is that? The differences fool many consumers.
FICO Scores versus Vantage Scores
There are some similarities.
Have a 30-day late payment, both Vantage and FICO credit scores will decline.
Have a lender’s “hard” inquiry and both Vantage and FICO scores will decline.
Pay down $1,000 on a $10,000 credit card balance and Vantage and FICO scores will both improve.
There are many instances however when the FICO and Vantage scores go in different directions
Open a new loan and a Vantage Score can decline, while the FICO score increases.
Pay off a Discover $100 credit card balance and your Vantage Scores increase, but the FICO scores decline.
Using the Same Credit Information
Vantage Scores state they use the same credit information as FICO Scores to determine their Vantage Scores. As you can see, this is a half-truth.
Vantage Scores are based on your Experian credit report for your Experian Vantage Score, based on Equifax for your Equifax Vantage Score, and based on TransUnion for your TransUnion Vantage Score.
FICO Scores also use Experian, Equifax and TransUnion credit reports to determine your Experian, Equifax and TransUnion FICO Scores respectively.
That is where their truth ends to state that Vantage Scores use the same credit information as FICO credit scores.
FICO Credit Scores also look at additional information in your credit report that Vantage Scores do not consider. FICO credit scores look at your credit card usage with banks and national credit card companies, and loans with high-risk lenders such as payday lenders and finance companies. FICO Scores measure medical collections differently than Vantage Scores.
An entire book could be written to identify all the differences between Vantage Scores and FICO Scores.
What Should You Do?
Bottom line: Do not rely upon any Vantage Score movement as an indicator of your FICO Credit Scores improvement or decline. Vantage Scores are just unreliable when trying to track your lender’s FICO Classic Scores – the scores your mortgage (and most credit card and auto) lenders use.
Make sure you track your Classic FICO Scores to get an accurate indicator the direction your lender’s FICO scores are moving. You can access your Classic FICO Scores through My Credit Plan.