Expanding Access Without Adding Risk: The Power of Modern Credit Scoring in Mortgage Lending

Highlights: 

• Choosing modern credit scoring options like VantageScore 4.0, enhanced with trended data and advanced machine learning, over legacy scores can provide mortgage lenders with clearer, more predictive, and reliable views of borrower behavior while also reducing lending costs and improving affordability, transparency, and access to homeownership.

• Layering richer credit insights earlier and more strategically throughout the lending lifecycle can help align borrower expectations, improve risk assessment, and reduce fallout rates and operational costs, positioning lenders to compete more effectively in an evolving, fast-moving mortgage market. 

No corner of the mortgage lending industry is seeing more change right now than the credit scoring ecosystem. The Federal Housing Finance Agency’s recent move to promote lender choice by allowing the use of VantageScore 4.0 marks a meaningful shift toward affordability—one that's projected to deliver more than $600 million in savings to lenders and borrowers.

Early adopters are already seeing the impact. CSL Financial, dedicated to their unique brand of Common Sense Lending, was among the first mortgage lenders to use VantageScore credit scores for underwriting non-GSE loans. In a recent conversation with the company’s director of retail lending, Jordan Sullivan, the discussion focused on how modern credit-scoring solutions and strategies, including the use of VantageScore for non-GSE loans, have helped strengthen competitiveness while expanding access to homeownership for hardworking families across the credit spectrum.  

Below are several themes that emerged from that discussion: 

1. Meet Borrowers Where They Are with Simple, Explainable Scoring 

Many consumers—particularly those with thin files or past credit challenges—actively monitor their credit before applying for a mortgage, often using VantageScore-based tools. That score shapes their expectations. When lenders rely on legacy mortgage scores that can differ by as much as 200 points, borrowers can be placed in entirely different score bands without understanding why, creating friction, confusion, and mistrust. 

Adopting VantageScore 4.0 helps align lender and borrower expectations, minimizing score discrepancies and making conversations simpler and more transparent. The result is a more relatable score and a streamlined experience that reduces fallout and improves confidence on both sides of the transaction. 

2. Use Trended Data to Sharpen Risk Insight

Trended data has proven to be a meaningful differentiator, helping CSL Financial increase pull-through rates by more than 10%—from 8% to 20% (a 150% increase) in just two years—without increasing delinquency levels. The lift applies across the board for all customers, not just specific age groups. 

By looking beyond a single point in time, lenders gain a clearer view of how credit behavior is changing over a 24-month period, whether it’s improving or deteriorating.

This added context supports more confident decisioning for borrowers with thinner files or older credit issues that no longer reflect current behavior. At the same time, it deepens insight into full-file borrowers who may be migrating across score bands. 

3. Cost Savings Compound Quickly

Beyond risk insight, the economics of modern credit scoring matter at a time when the “cost of credit” is under scrutiny across the mortgage industry. 

In just two years, it’s estimated that CSL Financial has saved nearly $100,000 in expenses alone by using VantageScore for non-GSE loans—and the cost savings accrue fast. 

That’s partly because VantageScore is less expensive than legacy scores, delivering immediate, up-front savings and strong ROI, especially for unrecoverable costs associated with declined loans and fallout. 

Over time, lenders can also grow their bottom line and market share by securely approving more loans for thin-file borrowers or those with derogatory credit activity; essentially, loans that competitors often overlook or deny. Additional cost savings are achieved through stable delinquency rates and lower downstream expenses related to loan servicing, collections, and write-offs. 

4. Layer Soft Pulls to Optimize Cost and Efficiency

Soft pulls play an increasingly important role in cost-optimized lending strategies. They provide early credit insight without impacting a borrower’s credit or triggering competitive alerts, and at a fraction of the cost of hard pulls.  

Used strategically throughout the mortgage lending lifecycle, soft pulls can support pre-qualification and pre-approval, provide early, time-saving income and employment signals, and enable proactive monitoring of undisclosed debt to help reduce end-stage fallout and expenses.  

Momentum toward modern credit scoring is accelerating. Lenders that move earlier are better positioned to price risk more accurately, deliver better borrower experiences, and improve portfolio growth and performance, thereby strengthening investor and stakeholder confidence. 

As the mortgage lending landscape continues to evolve, lenders that are willing to advance beyond legacy credit scores and adopt modern credit scoring solutions and strategies will gain a clear advantage, including the ability to not just “keep pace,” but lead. 

Listen to the full discussion here. 

The special edition of the Market Pulse podcast was recorded on January 28th, 2026. The conversation was hosted by Ashley Sellers, SVP Mortgage Leader at Equifax, and featured Jordan Sullivan, Director of Retail Lending at Common Sense Lending (CSL) Financial.