VantageScore statement on FHFA validation of FICO Classic

Date: November 16, 2020

As expected, FHFA recently announced that the GSEs have completed a validation of the “FICO Classic” credit score model, which was necessary to avoid any disruption to the mortgage finance marketplace and required to be completed by November 20, 2020. This action is in line with the timeline for assessing newer, more predictive and inclusive models to serve consumers and mortgage lenders. Specifically, see this passage from FHFA’s Final Rule for the “Validation and Approval of Credit Score Models” as published in the August 16, 2019 Federal Register that established the process:

…FHFA acknowledges that approving a credit score model in use for the past decade would not satisfy the intent of section 310 that the Enterprises consider credit score models developed after Classic FICO. FHFA expects that the Enterprises will also evaluate applications received in response to the initial Credit Score Solicitation and that the Enterprises may submit to FHFA a proposed determination to approve one or more of those credit score models for use, either to replace Classic FICO or in addition to Classic FICO.”

For further clarity, please see the timeline below which demonstrates that this is an expected, incremental step towards the GSEs’ approval of applications for credit scoring models that were submitted. Rest assured we will make every effort to ensure that FHFA’s recent announcement is a temporary step and that mortgage lenders and consumers will not be tethered to outdated and restrictive models for any longer than absolutely necessary.