Visual Studio Code scroll back buffer
Go to menu File → Preferences → Settings.
Then overwrite "terminal.integrated.scrollback": 1000,
(found in the left panel) with whatever you want in the right panel.
In newer versions, in the Settings pane, you can type "scrollback" as the search term and it should be found under Features/Terminal.
here is how i solved it:
ps: remember to open a new terminal for changes to take effect: