Perhaps the best way to understand why exactly the FICO SCORE is still the most important score is to take a close look at the Vantage Score as its main competitor.
According to court documents from 2009, the Vantage Score, at that time, had 5.7% of the credit scoring market share.(1)
According to the 2010 Congressional Testimony of VantageScore Solutions CEO, Barrett Burns, the Vantage Score is used by
"8 of the top 10 credit card issuers, 3 of the top 10 mortgage originators, [and] 7 of the top 50 auto lenders."(2)
These numbers explain a lot about WHY the FICO score is still the most important score to pay attention to.
Think about this:
80% of "top credit card issuers" use the Vantage Score (Keep in mind that we don't know who the "top credit card issuers" are according to the Vantage Score people… so the 80% number could be a little iffy.)
30% of mortgage lenders
14% of auto lenders
use the Vantage Score.
Of those three choices… credit cards, mortgages, and auto loans, where do you think you have the chance of saving the MOST MONEY by improving your credit score?
Answer: With auto loans and mortgages.
You could save $100,000 or more on a mortgage with a better credit score.
Good credit could mean the difference between a 3% interest rate and a 16% interest rate on an auto loan.
So with the majority of the real "money" loans still using the FICO score to determine credit worthiness, consumers would probably be better served to focus more of their attention on their FICO score versus the Vantage Score.
What we're saying here is that for the biggest loans you will get in your lifetime, as it stands right now, the FICO Score is still the score that matters.
It doesn't mean the Vantage Score won't matter in some markets. But chances are (in most cases) if you do something to raise your FICO score, your Vantage Score will go up too.
You can always ask the lender which score they use before applying, and make adjustments to your strategy as necessary, but as long as the Vantage Score has such a small percentage of meaningful market share, most consumers will want to focus on their FICO Score.
(1) UNITED STATES DISTRICT COURT, DISTRICT OF MINNESOTA, MEMORANDUM OPINION AND ORDER, Case 0:06-cv-04112-ADM-JSM
(2) Testimony of Barrett Burns, President and Chief Executive Officer, VantageScore Solutions, LLC, Before the Subcommittee on Financial Institutions & Consumer Credit Committee on Financial Services
United States House of Representatives Hearing on "Keeping Score on Credit Scores: An Overview of Credit Scores, Credit Reports and Their Impact on Consumers" March 24, 2010