More Creditworthy Consumers Shift From “No Loan” to Approved with VantageScore 4.0

Large mortgage brokers who have switched to VantageScore  now report significantly improved pricing, eligibility, and more approvals for creditworthy borrowers. Last week, many of the largest mortgage lenders in the U.S., such as United Wholesale Mortgage and NewRez, publicly shared for the first time their positive experiences with VantageScore 4.0 for conforming mortgages. One broker cited the ability to help borrowers secure “better interest rates, better terms, [and] better mortgage insurance terms.” ¹  These industry participants also describe the VantageScore 4.0 implementation as “seamless,” noting that access to VantageScore 4.0 provides additional flexibility in serving a broader range of creditworthy consumers. VantageScore 4.0 is the only modern credit score now available and implemented by both Fannie Mae and Freddie Mac that uses trended and alternative data, including rental payment data. 

At a recent industry conference, one mortgage servicer noted that “as a lender, having more modernized credit models is very appealing because they provide a better measurement of risk and can positively impact mortgage servicing.” Another added, “We participated in the Freddie Mac pilot to deliver loans using VantageScore, and those loans were ultimately securitized by Freddie Mac. There’s no better way to evaluate a model than by using it in real-world lending scenarios.”

“The consistent feedback we are seeing from mortgage brokers reinforces what we have proven quantitatively: VantageScore 4.0 expands access to mortgage credit while reducing risk and delivering meaningful savings for consumers through improved pricing and loan terms,” said Tony Hutchinson, EVP and Head of Public Affairs at VantageScore. “Importantly, VantageScore 4.0 is currently the only modern credit score approved and available for use in the conforming mortgage market for Fannie Mae, Freddie Mac, Federal Home Loan Bank and Veterans Administration mortgages.”

Key insights include:

• VANTAGESCORE MORTGAGE MARKET ADOPTION IS ACCELERATING FOLLOWING FHFA DECISION: The recent announcement of VantageScore 4.0 implementation for Fannie Mae and Freddie Mac mortgages is resulting in accelerating mortgage market adoption of VantageScore 4.0. Mortgage lenders report that the model is easy to implement, low-friction and immediately delivers competitive advantages for lenders and consumers in lending scenarios.

• VANTAGESCORE ADOPTION RESULTS IN TANGIBLE FINANCIAL BENEFITS: Many large mortgage lenders are reporting that VantageScore 4.0 directly improves affordability and loan economics for creditworthy borrowers. Using VantageScore 4.0 credit scores for mortgages helps creditworthy borrowers access lower interest rates, reduced mortgage insurance costs, lender credits and improved refinance opportunities.

• VANTAGESCORE 4.0 EXPANDS ELIGIBILITY FOR CREDITWORTHY BORROWERS: Brokers are increasingly describing situations where borrowers move from “no loan” to approved status after using VantageScore 4.0, helping qualify more creditworthy consumers who were previously excluded under failed, legacy credit scoring approaches.

Mortgage lenders are encouraged to explore the benefits of VantageScore 4.0 by visiting the VantageScore Mortgage Resource Center. Lenders and partners interested in adopting VantageScore models or participating in pilot programs can contact their credit bureau representatives:

Equifax: mortgage_inquiries@equifax.com

Experian: mortgages@experian.com

TransUnion: TU_Mortgage@transunion.com