New credit score option expands to lenders
Buyers who fall short under traditional credit scoring have another financing path now that more lenders can use VantageScore 4.0.
Buyers struggling to qualify under traditional credit scores now have another path to financing.
Fannie Mae and Freddie Mac opened VantageScore 4.0 to all approved single-family lenders, expanding an option previously limited to select companies. The change may be especially relevant for buyers with steady rent payments, limited traditional credit histories or recently improved financial habits.
VantageScore 4.0 considers changes in how borrowers manage debt over time and rental payment history when available. Because it calculates scores differently from Classic FICO, a buyer may not receive the same result under both models.
That doesn't guarantee mortgage approval or better loan terms. Credit scores are only one part of the decision, along with income, debt, employment and assets. But buyers who are close to qualifying can ask their loan officer which model is being used and whether VantageScore 4.0 is available.
What to know
- Lenders choose the model. They may use Classic FICO or VantageScore 4.0 on a loan-by-loan basis.
- Not every lender will offer it immediately. Companies may need time to update their technology and processes.
- Scores cannot be mixed. The same model must be used for every borrower on a mortgage.
- Classic FICO remains available. It also remains required for manually underwritten loans.
- Current credit-report rules remain. Lenders using VantageScore 4.0 must request scores from Equifax, Experian and TransUnion.
FHA borrowers will gain similar credit-scoring options next year. Starting Jan. 1, 2027, lenders may use VantageScore 4.0, FICO 10T or Classic FICO when reviewing most FHA mortgage applications.
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