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The Federal Housing Finance Agency, Fannie Mae and Freddie Mac are moving forward with updated credit scoring models for all forms of mortgage lending, including FHA loans, beginning in 2027. The announcement was made by Federal Housing Finance Agency Director William J. Pulte. 

The move builds on Pulte’s announcement last year that Fannie Mae and Freddie Mac would begin testing VantageScore 4.0 as part of the mortgage underwriting process.

The National Association of REALTORS® welcomed the change, saying a more modern approach to evaluating credit could broaden access to mortgage financing. The updated models may be particularly helpful for consumers with limited traditional credit histories, giving more prospective buyers an opportunity to qualify for a mortgage.

“The Federal Housing Finance Agency’s announcement marks an important step forward in modernizing the mortgage marketplace,” says NAR Executive Vice President and Chief Advocacy Officer Shannon McGahn. “For years, the National Association of REALTORS® has advocated for a more competitive and innovative credit scoring system, one that better reflects how consumers manage their financial lives today.”

VantageScore 4.0 was created by Equifax, Experian and TransUnion and is designed to evaluate credit behavior over time. The model can also incorporate certain payment information that has historically received less consideration in credit scoring, including rental, utility and telecommunications payments.  

Consumers who consistently make those payments on time could benefit from having that information reflected in their credit profiles. The Fair Isaac Corporation, commonly known as FICO, is working to implement its own modern score.

“Introducing competition into the credit scoring process has the potential to lower costs, improve efficiency and open the door to qualified borrowers who may have been overlooked under older models,” McGahn says. “By allowing multiple credit scoring models that consider rent, utility and other payment histories, this policy can provide a fuller picture of a borrower’s creditworthiness and open the door to homeownership for more Americans.”

NAR says the availability of additional credit scoring models could increase competition within the credit reporting industry while potentially improving accuracy and reducing costs. NAR will also continue to monitor the mortgage market and the experiences of lenders and consumers as these models are implemented to help ensure they are working as intended. This includes evaluating how the models affect access to credit, accuracy and consistency in mortgage underwriting and the broader homeownership market.

For more information, visit fhfa.gov/policy/credit-scores.