Fannie Mae and Freddie Mac Expand VantageScore Use for Homebuyers

Key points

• Fannie Mae and Freddie Mac have expanded the use of VantageScore 4.0 to all mortgages sold to them, moving beyond a limited pilot involving 50 lenders.
• VantageScore 4.0 considers alternative data such as rent and utility payments, which classic FICO scores do not, potentially helping borrowers with limited credit history.
• The Federal Housing Finance Agency is considering reducing the requirement for three credit reports (tri-merge) to two or even one, which could lower costs but risks missing data.
• The Federal Housing Administration will begin insuring mortgages using VantageScore 4.0 and FICO 10T starting January 1, 2026.
• Only 13% of rent payments are currently reported to credit bureaus, limiting the immediate impact of VantageScore 4.0 for many renters.

Background

In September 2026, the Federal Housing Finance Agency (FHFA) pushed for the adoption of VantageScore, challenging FICO’s long-standing dominance in mortgage lending. This move coincided with market concerns over credit bureau pricing and led to stock declines for FICO and major credit bureaus. The current expansion of VantageScore 4.0 to all Fannie Mae and Freddie Mac mortgages follows this earlier regulatory push.

How outlets are covering it

CNBC emphasizes the potential benefits for homebuyers with thin credit histories, noting that VantageScore 4.0 includes rent and utility payments. It also highlights the FHFA’s consideration of reducing credit report requirements, which credit expert John Ulzheimer warns could lead to missed data. Yahoo Finance, while primarily focused on stock performance, notes the significant price increase of Fair Isaac Corporation (FICO) stock, suggesting market optimism despite the regulatory shift. The two sources differ in focus: CNBC centers on consumer impact and policy changes, while Yahoo Finance highlights the financial market reaction to FICO’s performance.

Why it matters

The expansion of VantageScore 4.0 could make mortgages more accessible for homebuyers with limited credit history by incorporating alternative data like rent payments. This shift may also influence interest rates and approval rates, potentially broadening homeownership opportunities. Additionally, the FHFA’s consideration of reducing credit report requirements could lower costs for lenders and consumers, though it may introduce risks in credit assessment.

What to watch

The Federal Housing Finance Agency is expected to approve FICO 10T for mortgage use in the coming months. The Federal Housing Administration will begin insuring mortgages using VantageScore 4.0 and FICO 10T on January 1, 2026. The FHFA may also finalize decisions on reducing the number of credit reports required for mortgage applications, potentially moving from three to two or one.