{"id":43561,"date":"2026-05-05T12:23:34","date_gmt":"2026-05-05T12:23:34","guid":{"rendered":"https:\/\/financialrush.com\/?p=43561"},"modified":"2026-05-05T12:23:34","modified_gmt":"2026-05-05T12:23:34","slug":"mortgage-lenders-now-have-more-credit-score-options-what-to-know","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=43561","title":{"rendered":"Mortgage lenders now have more credit score options. What to know"},"content":{"rendered":"

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Catherine Delahaye | Getty<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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There’s a shift going on with credit scores<\/a> in the homebuying<\/a> process that consumers may want to be aware of.<\/p>\n

Mortgage<\/a> lenders are now permitted to use a credit score<\/a> called VantageScore 4.0 as part of their underwriting process instead of a “classic” FICO score, which has been the only approved score for decades<\/a>, government officials announced<\/a> April 22. At some point in the coming months, another alternative score, FICO 10T, will also be permitted.<\/p>\n

The change applies to mortgages sold to Fannie Mae<\/a> and Freddie Mac, government-sponsored enterprises that are the largest purchasers of mortgages on the secondary market. Additionally, the Federal Housing Administration, which insures many loans for first-time buyers, also will soon use these two scores, Housing and Urban Development Secretary Scott Turner said during a press conference<\/a> announcing the changes. HUD oversees the FHA.<\/p>\n<\/div>\n

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Read more CNBC personal finance coverage<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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Twenty-one large mortgage lenders are part of the first wave that will use VantageScore 4.0, Federal Housing Finance Agency Director Bill Pulte said during the press conference. The FHFA oversees Fannie Mae and Freddie Mac. Pulte also said Freddie Mac has already taken $10 million in loans approved using VantageScore 4.0.<\/p>\n

The significance of the changes for consumers<\/a> is that these two alternative credit scores use data points that a classic FICO score doesn’t consider. While lenders may still use the classic FICO score, they will have a choice in which scores to use \u2014 and the newer models could help some consumers qualify for a mortgage or get a better rate.<\/p>\n

Here’s what to know.<\/p>\n<\/div>\n

Rent, utility payments count \u2014 if they get reported<\/h2>\n
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A notable difference between a classic FICO score and the approved newer models is the potential inclusion of a consumer’s history of paying rent<\/a> and utilities<\/a>.<\/p>\n

The idea is that some consumers may consistently pay those bills on time, and their score could benefit from that \u2014 especially if they don’t have much on their credit report, such as credit cards<\/a> or an installment loan, for instance.<\/p>\n

“How can you not have credit scores include a major factor in the past payment history of somebody with rent?” Pulte said during the press conference. “That’s highly predictive.”<\/p>\n<\/div>\n

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However, a score that factors in rent history or utility payments has to receive that information, and experts say most renters’ data is not making its way to the credit bureaus for use in any score.<\/p>\n

“Just because you’re renting an apartment doesn’t mean it’s being reported to any credit bureau,” said John Ulzheimer, a credit expert and president of The Ulzheimer Group in Atlanta.<\/p>\n

Currently, VantageScore models capture only rent or utility payment data that consumers opt in to have reported to the three largest credit reporting companies, Equifax<\/a>