Preparing for widespread credit score changes, the leading credit score company and analysis data VantageScore launched the Mortgage Resource Center to support lenders transitioning to the VantageScore 4.0 credit model.
The new resource provides tools and guidance to facilitate integration and align with the growing adoption of VantageScore 4.0 by a number of industry players. These include US Department of Veterans Affairs (VA) and Federal Home Loan Banks (FHLBs) in New York, Chicago and San Francisco.
The initiative comes as the real estate industry prepares for mandatory adoption of VantageScore 4.0 by October 2025, as required by the Federal Housing Finance Agency (FHFA). The updated model replaces traditional FICO scores and uses other data points — such as rental payment history — to better assess borrower eligibility.
Tony Hutchinson, senior vice president of industry and government relations at VantageScore, described the Mortgage Resource Center as an important tool for lenders as they continue to collaborate. Freddie Mac again Fannie Mae.
“The quick transition ensures that lenders remain in a good position to continue doing business with Fannie Mae and Freddie Mac, as well as other major GSEs that currently accept VantageScore loans,” Hutchinson said in a statement. “If you’re a lender, you need to use VantageScore 4.0 now or risk losing access to important GSE mortgages.”
VantageScore’s Mortgage Resource Center offers a step-by-step playbook for putting together a new credit scoring model. Lenders also gain access to CreditGauge, Inclusion360, RiskRatio and MarketGain to assess consumer health, highlight underserved consumers, assess default rates and test market opportunities.
By 2024, VantageScore 4.0 integration is ramping up among lenders. FHLBank of New York adopted the model late last month to serve 3.1 million potential borrowers in New York, New Jersey, Puerto Rico and the US Virgin Islands. VantageScore says it has helped at least 33 million more consumers compared to traditional credit scoring models, including 4.1 million minority borrowers with credit scores below 620.
Related
Source link
