With the industry preparing for updated credit score and credit report requirements at Fannie Mae and Freddie Mac, VantageScore has announced the launch of its new “Mortgage Resource Center” to help lenders transition to VantageScore 4.0.
The FHFA in 2022 approved two new credit score models, FICO 10T and VantageScore 4.0, for use by Fannie and Freddie, replacing the Classic FICO model that the government-sponsored enterprises (GSEs) have used for roughly two decades. The incoming models are touted to be more predictive and inclusive than traditional credit scores: A July statement from VantageScore, for example, says that VantageScore 4.0 scores “an estimated incremental 30 million people than traditional models.”
Fannie Mae and Freddie Mac will begin requiring VantageScore 4.0 in 11 months. The new Resource Center includes several tools for lenders readying themselves to make the switch, including VantageScore’s official “Migration Playbook,” which summarizes how to implement VantageScore 4.0 for underwriting mortgages. Also included are various implementation FAQs, timelines, background information and links to external resources about the Federal Housing Finance Agency’s (FHFA) decision to approve the new scoring models.
Additionally, the site includes a suite of free-to-access tools offering, according to a statement, “timely data insights into the predictive and inclusionary power of VantageScore.” Those include CreditGauge, a monthly analysis of U.S. consumer credit health; Inclusion360, which helps find underserved consumers by geographic market; RiskRatio, which examines the relationship between credit scores and default levels; and MarketGain, which looks at potential market growth after implementing VantageScore 4.0.
“Adopting VantageScore 4.0 now is straightforward for lenders, and we’re here to support them every step of the way with a comprehensive set of data tools and guidance,” said Tony Hutchinson, senior vice president, industry and government relations, VantageScore.
“An immediate transition ensures lenders remain well-positioned to continue doing business with Fannie Mae and Freddie Mac, as well as the other principal GSEs that can accept VantageScore mortgages right now. If you are a lender, you need to be implementing VantageScore 4.0 now or risk losing access to key mortgage GSEs.”
