In a move described by Bill Pulte as “seismic” on social media, Rocket Mortgage said it will become the first mortgage lender to use VantageScore 4.0 as its preferred credit scoring model for all eligible loans beginning in the fourth quarter.

The move comes as Pulte, director of the Federal Housing Finance Agency (FHFA) and chair of Fannie Mae and Freddie Mac, has continued his push for greater competition among credit scoring companies.

Rocket said it tested the scoring model for four months and found that “VantageScore helped more clients qualify and move forward in the mortgage process, while also reducing credit scoring costs.”

Advertisement

In the announcement, Rocket Mortgage CEO Jay Bray thanked Pulte for his “leadership in encouraging multiple credit scoring models that ultimately benefit the American homebuyer.”

“The mortgage industry has relied on one credit scoring model for decades,” Bray said, referring to Classic FICO. “Competition is healthy, especially when it can lower costs and expand responsible access to homeownership.”

VantageScore was launched in 2006 by Equifax, Experian and TransUnion to compete with the traditional FICO credit score.

Rocket, one of the top mortgage lenders in the U.S., said in a statement that it had obtained 1.4 million credit reports using both VantageScore and FICO so far this year.

After what it described as an extensive study, Rocket determined “VantageScore 4.0 opens access to some clients who wouldn’t be served otherwise, and many are able to secure a mortgage on better pricing terms.” It said for those who saved money, the average savings at closing was $1,600.

“FHFA and Director Pulte are encouraging competition and innovation in pilot programs,” the company said. “Rocket Mortgage is now ready to shift credit scores to the latest technology and will continue to evaluate new options as they become available.”