Millions Could Gain Mortgage Eligibility with New Credit Scoring Models

The mortgage industry is undergoing its most significant transformation in decades as the Federal Housing Finance Administration (FHFA) and the Housing and Urban Development (HUD) transition to a new era of credit scoring competition with the official acceptance of more modern credit scoring models.

For years, mortgage lending relied on only one model. Now, the recent changes permit the use of VantageScore 4.0 and FICO 10T for FHA-insured mortgage underwriting, and for Government-Sponsored Enterprises (GSEs) to immediately accept VantageScore-scored loans from approved lenders. The shift enables a more inclusive and accurate view of borrower creditworthiness by incorporating trended and alternative credit data, opening up new homeownership opportunities for millions of Americans. 

The VantageScore 4.0 Difference: a "360-degree" View of a Consumer’s Financial Profile

VantageScore 4.0 is the first tri-bureau credit-scoring model to incorporate trended and alternative credit data. Considering alternative data—such as rent, utilities, and telecommunications payments—as part of credit scores is critical to offering a more comprehensive and "360-degree" view of a consumer’s financial profile. And it is also important to evaluate changes in credit data over time for a fuller financial picture. VantageScore 4.0 analyzes up to 24 months of trended data, helping lenders identify qualified borrowers with "thin" credit files while maintaining the highest standards of safety and soundness.

How to Know which Model a Lender is Using

Not every lender will transition at the same speed so it is important to ask the right questions. If a consumer is applying for a mortgage, they have the right to understand how they are being evaluated and how the decision was made. 

• Inquiring with the loan officer: Applicants should ask, “Which credit scoring model will be used to evaluate the application? Is VantageScore 4.0 being allowed?”

• Reviewing the disclosures: When an application is submitted, lenders are required to provide certain credit score disclosures that should name the model used.

Three Steps Consumers Can Take to Verify Their Financial Picture

In addition to understanding credit scoring options, consumers should take proactive steps to ensure their credit profile is mortgage-ready:

• Audit Credit Reports: Consumers can access their free credit report through Equifax Core Credit™ or at annualcreditreport.com to ensure accuracy.

• Focus on Consistency: Maintaining consistent, on-time payment habits is the most effective way to build a high-performing "financial trajectory."

• Utilize Planning Tools: Use Optimal Path™ — the company’s interactive credit score planner available through the myEquifax mobile app free of charge — which integrates with a consumer's current Equifax credit profile to provide specific tasks that they can execute within the next 30 days to help reach their target credit score goal.

How is Equifax Supporting Credit Scoring Competition and Mortgage Affordability?

A shift to VantageScore 4.0 could drive a potential $1 billion in savings for the mortgage industry. To help drive adoption and reduce loan acquisition costs for consumers, Equifax is offering VantageScore 4.0 for mortgage lending at $1 through the end of 2027. Additionally, Equifax offers free VantageScore 4.0 credit scores to all Equifax customers in mortgage, automotive, card and consumer finance who purchase FICO scores. As of May 2026, over 500 mortgage lenders were taking advantage of the Equifax offer of free VantageScore credit scores with paid FICO scores, and more than 90 non-GSE and GSE lenders are in production with only VantageScore credit scores for some of their portfolios.

Learn about how alternative data from Equifax can help expand access to homeownership.