Fannie Mae and Freddie Mac on Wednesday released historical credit score data for FICO Score 10T, along with expanded data for VantageScore 4.0. This move marks a significant shift in how mortgage creditworthiness may be assessed in the future.
The release provides lenders and investors with a deeper look at how borrowers would have been scored under these newer models, which could influence underwriting standards. The GSEs have been testing these alternative scoring systems to evaluate their impact on access to credit.
Expanding the VantageScore 4.0 file adds another layer of data, giving the mortgage industry more tools to assess risk. These models often capture a broader range of borrower behavior, such as rent and utility payments, potentially opening homeownership to more applicants.
Industry observers note that while these scores may improve credit access, they also require significant system updates and retraining for lenders. The transition from current models could take years, given the complexity of mortgage origination processes.
Critics caution that broader credit scoring could lead to increased risk if not properly calibrated. The debate over which scoring model best balances access and safety remains unresolved, with regulators likely to weigh in as adoption progresses.