Understanding the VantageScore Credit and How It Impacts Homebuying

Credit scores play a crucial role in the mortgage approval process, particularly for first-time homebuyers trying to understand where they stand financially. While FICO has long been the most commonly used scoring model, the VantageScore has gained momentum in recent years, especially with its latest version now accepted for certain mortgage applications. Understanding how the VantageScore works, and how it differs from FICO, can provide buyers with a broader picture of their readiness to purchase a home.

What Is the Vantage Credit Score?

The VantageScore is a credit scoring system developed collaboratively by Equifax, Experian, and TransUnion. Like FICO, it uses a 300-850 range to assess creditworthiness. But the similarities mostly stop there.

One of the biggest updates in VantageScore 4.0 is the inclusion of alternative data, such as rent, phone, and utility payments. These inputs are especially helpful for people who don’t have an extensive credit history but still demonstrate financial responsibility. This version also de-emphasizes isolated late payments and places greater weight on trends in payment behavior.

For individuals who haven’t used credit cards heavily or taken out loans, but who consistently pay their monthly bills, this model can offer a fairer reflection of creditworthiness.

VantageScore vs. FICO: What’s the Difference?

Both VantageScore and FICO assess how likely you are to repay borrowed money, but they differ in methodology and usage. FICO has long been the default for mortgage lending, while VantageScore is newer and recently approved for mortgages backed by Fannie Mae and Freddie Mac. For buyers with non-traditional credit histories, like those who consistently pay rent and utilities, VantageScore may offer a more accurate and inclusive view, potentially improving their chances of qualifying for a loan.

Does the Vantage Credit Score Matter for Mortgages?

It does, more than ever. While many lenders still rely on FICO by default, VantageScore is now an accepted option for loans sold to Fannie Mae and Freddie Mac. That gives lenders more flexibility and buyers more opportunity.

This is particularly good news if you’re earlier in your financial journey. Maybe you’ve been steadily saving, paying rent on time, and keeping up with other bills, but haven’t built traditional credit through loans or credit cards. VantageScore recognizes those efforts, often giving buyers a more accurate sense of where they stand.

Understanding both scores gives you a broader, more transparent view of your financial readiness. And being aware of how lenders may evaluate you, even if they ultimately use FICO, helps reduce uncertainty.

Common Questions About VantageScore

Is VantageScore your actual credit score?

Yes, it’s a real score, not just a placeholder. Lenders can choose whether to use it or FICO, and more are starting to consider both.

What is a good Vantage credit score?

VantageScore uses the same scale as FICO. Generally, anything from 661 and up is considered “Good,” and above 781 is “Excellent.” If your score falls in the good or excellent range, you’re likely in a strong position for a mortgage conversation.

Is VantageScore usually higher than FICO?

It can be, depending on how your financial history is structured. Because VantageScore includes more types of data, people with limited credit files sometimes see a slight bump. But that’s not always the case, the models weigh different factors differently.

Do banks use FICO or VantageScore?

Most still default to FICO, especially for mortgages. But with major institutions now accepting VantageScore-backed loans, the gap is narrowing. You may see both used more interchangeably in the near future.

How to Track and Improve Your VantageScore

Improving your VantageScore relies on many of the same habits that support a strong FICO score. Paying bills on time, including rent and utility payments, is one of the most impactful actions you can take. Keeping your credit card balances low relative to your available limit also helps, as lower utilization reflects responsible credit use.

It’s equally important to check your credit report regularly for errors and avoid applying for new credit too frequently. Since VantageScore 4.0 includes alternative data, you may benefit from having your rent and utility payments reported to the credit bureaus through services like Experian Boost or your property manager, if available.

Get Started with New VantageScore 4.0 with Foyer

The VantageScore is more than just a number on a credit app. It's quickly becoming a practical tool in the mortgage process, and a meaningful one for people who’ve been underserved by the traditional system. Whether you’re deep into your home search or just starting to set goals, keeping an eye on both your savings and your credit score gives you the confidence to move forward.

And with Foyer, you don’t have to do it alone. You can plan, save, and track your progress, all in one place.

Take control of your journey. Get started with Foyer today.