VantageScore White Paper Addresses Key Operational Challenges to Ending FICO’s Monopoly in the Mortgage Market

Date: October 22, 2017

Today, VantageScore® Solutions, LLC, developer of the VantageScore credit score model, released a new white paper that addresses key operational challenges that have been cited as the Federal Housing Finance Agency (FHFA) enters the back stretch of its assessment of the feasibility to allow lenders to choose which credit scoring model is the best fit for their businesses.

The white paper “New credit scoring models: a smooth transition to more transparent mortgage capital markets,” is published ahead of FHFA’s expected “Request for Information” (RFI) on this matter. In this process, interested parties, including mortgage lenders, investors in mortgage-backed securities (MBS) and consumer advocates, will be asked to provide feedback to key questions which relate to a possible transition from the status quo, a government-sanctioned monopoly, to an environment in which credit score competition and choice will be allowed.

Currently, and for more than the last two decades, Fannie Mae and Freddie Mac have “locked-in” outdated, conventional credit scoring models, through their seller servicer guidelines. These guidelines require lenders who rely on automated underwriting to use older versions of the FICO model that are based on sample data which dates from 1995 through 2000.

To assist industry participants in their response to FHFA’s request and to help address challenges recently raised in a speech by FHFA director Mel Watt, the white paper makes four key recommendations:

1) Give lenders a choice between the latest validated scoring models, but require them to stick with the initial choice they make for a period of time in order to prevent “gaming” or “score-shopping.”

2) Well before implementation, provide capital markets participants with a historical database, which includes credit scores from the latest validated models and loan attributes, so that market participants can recalibrate prepayment models.

3) Regardless of what choice lenders make at the time of origination, ensure that investors receive the VantageScore credit score and, if possible, the current legacy credit score for every loan in every pool.

4) Improve transparency by disclosing monthly credit score updates to all MBS investors.

The white paper is available for free at

About VantageScore Solutions

Credit scores can impact many aspects of your life, everything from whether you are able to get a loan and how much interest you will have to pay to whether you are able to rent an apartment.

VantageScore Solutions, LLC ( is the independently managed company that owns the intellectual property rights to the VantageScore credit scoring models and is the leader in scoring innovation. Recently introduced VantageScore models score 30-35 million consumers who typically are not scored by conventional models without relaxing standards. VantageScore credit scores are used by lenders, landlords, utility companies, telecom companies, and many others to determine your creditworthiness. By using the VantageScore model, these enterprises have access to many more consumers, and in turn, consumers have greater access to mainstream credit.

While there are many credit scoring models in the industry, the “win-win” for VantageScore is its innovative, highly predictive, patent-protected, tri-bureau scoring methodology that provides lenders and consumers with more consistent credit scores across all three national credit reporting companies. VantageScore is also the model tens of millions of consumers use to monitor their credit behaviors through dozens of websites and lenders who provide their users and customers with their credit scores for free. More than eight billion VantageScore credit scores were used in the 12-month period from July 2015-June 2016 by over 2,400 lenders and other industry participants, including 20 of the top 25 financial institutions – an increase of nearly 40% over the previous 12-month period.

The company is celebrating its 11th anniversary in 2017.