Incorporating rental payment data into VantageScore 4.0 is a game-changer in credit scoring - and the most influential policymakers in the mortgage space agree.
Over the weekend, Bill Pulte, Director of the Federal Housing Finance Agency (FHFA), highlighted the Scotsman Guide’s new article on how rental history enhances the predictive power of VantageScore 4.0. By incorporating this innovative use of alternative data, VantageScore is at the forefront of expanding mortgage access to millions of creditworthy Americans.
The Scotsman Guide article centered on VantageScore’s latest research paper, which shows that millions of current renters in the U.S. could become eligible for homeownership if their positive rent reporting histories were incorporated into their credit files.
Positive rental payments are highly predictive and allow VantageScore 4.0 to measure a borrower’s true ability to meet mortgage debt obligations,” says Dr. Andrada Pacheco, Chief Data Scientist at VantageScore. “This comprehensive research study confirms that potential homeowners with positive, on-time rental payment histories will benefit significantly from incorporating rental data into their credit reports.
The VantageScore 4.0 credit scoring model was approved by the Federal Housing Finance Agency (FHFA) in July for loans delivered to Fannie Mae and Freddie Mac. In announcing the move, Director Pulte referenced the VantageScore model’s incorporation of rent payment data and highlighted that it would expand credit access to “millions of forgotten Americans.”
To read the full Scotsman Guide article, visit: https://www.scotsmanguide.com/news/rental-history-in-credit-scores-could-expand-mortgage-access-to-millions-vantagescore
To read FHFA Director Bill Pulte’s post on X, visit:
