The FHFA just announced a major shift:
Fannie Mae and Freddie Mac will now accept VantageScore 4.0 for mortgage qualifications.
Why does this matter?
Because an estimated 5 million new borrowers, many of them younger, new-to-credit, or underrepresented, could now enter the housing market.
FICO vs. VantageScore 4.0: What’s the Difference?
The Similarities:
- Both use your credit report to generate a score.
- Both score on a 300–850 range.
- Both consider factors like credit utilization, payment history, and credit length, just with different weightings.
The Key Differences:
- Credit History Requirements:
- VantageScore: Needs just 1 month of history.
- FICO: Requires 6 months of history.
- Score Versions:
- FICO: Has industry-specific scores (Mortgage, Auto, Bankcard).
- VantageScore: Uses one universal score.
- Payment History Weighting:
- VantageScore places more emphasis on your payment history compared to FICO.
Why This Is a Big Deal
This change opens the door for:
- First-time buyers with limited credit history
- Renters with strong recent credit activity
- Borrowers shut out by traditional scoring models
Want to know if VantageScore could help your clients qualify, or re-qualify? I’m happy to run the numbers. Just reach out!
Mortgage News 