Lenders can now use VantageScore 4.0, which captures rent and utility payments in credit history, for conventional mortgages, as highlighted by Yahoo! Finance.
The companies that now buy up the majority of the country’s home loans will now accept VantageScore 4.0 for mortgages - a change that VantageScore estimates could help five million Americans qualify for mortgage access. This decision is designed to end the monopoly in credit scoring mortgage underwriting, while also lowering closing costs and expanding credit to more borrowers.
VantageScore 4.0 is designed to more closely look at consumers with limited credit histories, in part by allowing rent and utility payments to factor into a credit file.
In an interview with Yahoo! Finance Live, VantageScore President and CEO Silvio Tavares discussed the Federal Housing Finance Agency’s (FHFA) historic decision to allow VantageScore 4.0 to be used for GSE-funded mortgages.
This is a huge change that is going to include more people who have been left behind,” added Tavares. “It’s a benefit not just for competition, but also for many American homebuyers who are going to get their first chance to own a home.
Read more on the FHFA’s decision to implement VantageScore: https://vantagescore.com/resources/knowledge-center/press_releases/vantagescore-4-0-allowed-for-use-on-all-fannie-mae-and-freddie-mac-mortgages-effective-immediately.
