Federal Housing Finance Agency announced July 8 that the government-sponsored enterprises, Fannie Mae and Freddie Mac, will begin accepting VantageScore 4.0 for mortgage underwriting, either alongside or in place of traditional FICO credit scores. This change, effective immediately, provides potential homebuyers with an extra boost that can either qualify them for a mortgage or reduce the cost of the loan.
VantageScore 4.0 is a newer model developed by the three major credit bureaus (Equifax, Experian and TransUnion) that analyzes changes in credit data over time and includes additional data points, such as rental, utility and telecom payments, in the credit report, rewarding borrowers for making timely payments. These data points have traditionally been excluded from credit reports.
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