VantageScore, a leading national credit-scoring company, is the “better” credit score for mortgages according to leading U.S. banks. Recently, third-party research from those banks found that VantageScore 4.0 provides superior risk assessments than traditional credit score models and can be “a better indicator for cashout activity and credit performance.” The analyst report was featured on The Score Podcast from VantageScore[1].
These analyses were recently completed by comparing VantageScore 4.0 credit scores spanning 10 years and over 45 million loans released by Fannie Mae and Freddie Mac on July 11, 2024.
In addition to the banks’ independent research, VantageScore 4.0 has recently been adopted by leading Government-Sponsored Entities (GSEs) for mortgage use. This includes:
- Federal Home Loan Bank of San Francisco (March 2024)
- Federal Home Loan Bank of Chicago (June 2024)
- United States Veterans Administration (September 2024)
- Federal Home Loan Bank of New York (October 2024)
VantageScore has rapidly expanded its footprint to be one of the most innovative and inclusive credit scoring models in the market. VantageScore’s recent growth includes:
- 8 of the Top 10 Banks Use VantageScore – VantageScore is used by 8 of the top 10 banks nationwide and by more than 3,400 financial institutions
- 42% Annual Growth – Usage of VantageScore credit scores grew 42% in 2023 to more than 27 billion scores
- 172% Growth in Credit Cards – In 2023, growth of VantageScore credit scores by financial institutions increased by 46%, and usage among credit card lenders surged 172%.
The Federal Housing Finance Administration (FHFA) mandated VantageScore 4.0 for mortgages guaranteed by Fannie Mae and Freddie Mac pursuant to the 2018 Federal Credit Score Competition Act. VantageScore 4.0 exhibits superior inclusive and predictive power, and provides lenders with a highly predictive, consistent, and fair credit scoring model,” said Tony Hutchinson, Senior Vice President and Head of Government and Industry Relations for VantageScore.
To learn more about migrating to VantageScore 4.0, visit our Mortgage homepage.
[1] “The Score” Podcast, https://www.youtube.com/watch?v=iPgilo13Gz8
