The Mortgage Industry & VantageScore

VantageScore 4.0 Mortgage
Resource Center
The VantageScore Mortgage Resource Center helps lenders transition to VantageScore 4.0 for mortgage lending.
A New Era in Mortgage Credit Scoring
In 2018, President Trump signed the Credit Score Competition Act, ushering in a shift toward more modern credit scoring models. This legislation mandates the use of updated credit scores, including VantageScore 4.0, in mortgage lending. Senator Tim Scott (R-SC), chair of the Senate Banking Committee in the 119th Congress, was a key sponsor of the bill.
Adoption by Major Mortgage Enterprises

In 2024, several government-sponsored enterprises (GSEs) adopted VantageScore 4.0, including:

Fannie Mae and Freddie Mac are set to require VantageScore 4.0 beginning in 2025.

Mortgage Migration Playbook

VantageScore Migration Playbook outlines how to implement VantageScore 4.0 for underwriting mortgages.

Impact Whitepaper

Impact of Requiring VantageScore 4.0 for Mortgage Whitepaper.

Mortgage FAQs

Frequently Asked Questions about VantageScore 4.0 for Mortgage.

FHFA's Credit Score Updates

Watch our latest webinar about FHFA's Credit Score Updates.

Digital Analytics Tools

Lenders gain timely data insights into the predictive and inclusionary power of VantageScore via a suite of free access tools: CreditGauge™, Inclusion360®, RiskRatio™ and MarketGain™.

External Resources

FHFA's New Ruling and Mortgage Acceptance Timeline

Thanks to a landmark decision by the Federal Housing Finance Agency (FHFA), mortgage lenders that sell loans to either Fannie Mae or Freddie Mac (also known as the GSEs) will be required to use the VantageScore 4.0 model.

The FHFA's decision opens the door to millions more qualified applicants without lowering credit risk standards.

The result of the decision is a mortgage lending industry that serves consumers through the advancement of financial inclusion and supports mortgage lenders seeking to grow their portfolios.

What does it mean for the mortgage industry?

Millions More Borrowers
Financial Inclusion Through Homeownership
Growing Lenders Portfolios
Read VantageScore's Full Statement

Mortgage Acceptance Timeline

Q2 2023
Industry Feedback Window
Q3 2023
Publish Uniform Loan Delivery Dataset (ULDD) specifications to support the updates.
Q3 2024
Publish VantageScore® 4.0 historical credit scores.
JAN 2025
FHLB of Dallas accepts VantageScore 4.0 for mortgage collateral
TBD
Publish FICO® Score 10 T historical credit scores.
TBD
Lenders deliver VantageScore® 4.0 and FICO® Score 10 T credit scores in addition to Classic FICO credit scores, and GSEs update MBS/CRT disclosures to include VantageScore® 4.0 and FICO® Score 10 T.
Q4 2025
Implement “tri-merge” to “bi-merge” reports (optional) and new credit score calculation (mandatory) and incorporate new credit score model requirements into mortgage processes, while simultaneously retiring Classic FICO.
Note: Milestones related to the implementation of FICO® Score 10 T are dependent on achieving the necessary conditions for the acquisition and publication of FICO® Score 10 T historical data.
Start a VantageScore 4.0 Mortgage Pilot Today

The Federal Housing Finance Agency (FHFA) has approved the use of VantageScore 4.0 for lenders who sell loans to Fannie Mae or Freddie Mac (also known as the Government Sponsored Enterprises, or GSEs). This landmark decision enables lenders to take advantage of VantageScore's highly predictive and inclusive credit scoring model. Lenders nationwide are already realizing the benefits of VantageScore 4.0 for mortgage – start your pilot today!

What Industry Leaders Are Saying

BMO Bank is a purpose-driven organization that is focused on leveling the playing field in underserved communities and creating the conditions for inclusive economic growth. VantageScore has provided us with the opportunity to provide fair and accurate credit scores to a broader population, and we look forward to leveraging VantageScore for mortgage lending in the future to help further close the housing gap.

Mark Shulman, Head of Consumer Lending, BMO Bank

We believe in driving financial inclusion and creating more equitable access to credit in the communities we serve. We've been using VantageScore 4.0 for our auto loans and credit cards and that's provided us with a new pathway to provide fair and accurate credit scores to a broader population, creating opportunities for us to lend credit safely and soundly to consumers historically left behind. We look forward to leveraging VantageScore 4.0 for mortgage lending in the future.

Richard Wada, Chief Lending Officer at Patelco Credit Union

Why Is the FHFA Announcement Important?
Woman typing
Approximately 33 million more Americans can be scored by our models.
Out of the newly scored Americans, 16% are African-American or Hispanic, highlighting a notable portion of the population.
Illustration of a millenial woman using technology.

Demographic Breakdown

Newly Scorable
Scores 620+

Total
33 Million
13 Million

White
21.6 Million
9.2 Million

Black & Hispanic
9.5 Million
3.1 Million

Asian
1.3 Million
<1 Million

Native American & Pacific Islander
290,000
100,000

Breakdown of Newly Scorable Consumers

Emerging Borrower/ Young File
Young to credit
Consumers who have only credit accounts that are less than six months in age

Dormant
Infrequent or rare users of credit
Consumers who haven't had an update/reporting on their credit files in the past six months but have had updates more than six months ago

No Trades
Have only external collections, public records and inquiries on their file
Consumers who have no credit accounts but are scored based on external collections and public records on their file
Illustration of millienial woman using technology
21% of millennials have "thin files," making it difficult for lenders to see them as strong borrowers and leading to more young consumers not able to get the credit they need.
Why VantageScore?

More Potential Customers

VantageScore allows lenders to accurately assess approximately 33 million more consumers than with other commercially available models. More than 10 million of these newly scored consumers have scores of 620 and above and thus are potentially eligible for mortgages.

Strong Risk Management

VantageScore is at the cutting edge of predictive power thanks in part to its highly sophisticated model architecture and its innovative use of data. The VantageScore 4.0 model features the use of trended credit data and machine learning to drive predictive performance. VantageScore provides more precise decisioning enabling more mortgage application approvals while limiting defaults.

Close The Homeownership Gap

Home equity is the lifeblood for building wealth in the U.S. economy. With VantageScore, lenders can reach approximately 10 million more veteran and rural borrowers with credit scores above 620. By providing mortgage finance opportunities to these historically underserved but creditworthy borrowers, we can begin to address the widening homeownership gap in America.

More Consumer Friendly

VantageScore has been proud to pioneer the use of rent, telecom, and utility data and the exclusion of paid collection accounts. These consumer-friendly features also help lenders by giving them a more complete and fair picture of their customers' creditworthiness.

Mortgage Industry Usage
In advance of the GSE's migration to using VantageScore, there are sectors of the mortgage market where VantageScore may currently be used.

Portfolio Management

VantageScore credit scores are effective tools for monitoring the ongoing risk of mortgage portfolios.

Mortgage Backed Security Analysis

The VantageScore model is often used in loan-level valuation analyses for previously issued mortgage-backed securities.

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