New Help Is Here for Mortgage Lenders: VantageScore Launches Mortgage Center

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Nov 18, 2024, 08:00 ET

Mortgage Lenders Adopting VantageScore 4.0 Now Access Millions of New Credit-Worthy Consumers

SAN FRANCISCO, Nov. 18, 2024 /PRNewswire/ -- VantageScore, a leading national credit-scoring company, today launched a new Mortgage Resource Center to enable lenders transitioning to VantageScore 4.0 for mortgages. In 2018, the Credit Score Competition Act ushered in a new era of homeownership requiring the use of new and more modern credit scores for mortgage lending including the VantageScore 4.0 credit score. This year, many of the largest government-sponsored mortgage enterprises ("GSEs") adopted VantageScore 4.0 with immediate effect. These GSEs include the Veterans Administration, Federal Home Loan Bank of New York, Federal Home Loan Bank of Chicago, and Federal Home Loan Bank of San Francisco. Fannie Mae and Freddie Mac will begin requiring VantageScore 4.0 in 11 months.

VantageScore's Mortgage Resource Center is a comprehensive platform offering essential tools for lenders so they can start using VantageScore 4.0 immediately, including:

Migration Playbook: VantageScore's official Migration Playbook outlines how to implement VantageScore 4.0 for underwriting mortgages.
Digital Analytics Tools: Lenders gain timely data insights into the predictive and inclusionary power of VantageScore via a suite of free access tools: CreditGauge^®, a monthly analysis of U.S. consumer credit health; Inclusion360^®, which uncovers underserved consumers by geographic market; RiskRatio^®, which examines the relationship between credit scores and default levels, and MarketGain^®, which looks at the increased addressable market after implementing VantageScore 4.0.
Training Resources, Timeline and Background Information: In-depth information about the FHFA's decision mandating VantageScore 4.0 for mortgage, key milestones, and implementation FAQs are available to help lenders plan their transition.

"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, SVP, 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."

Lenders can reach out directly to [email protected] with questions and for support.

Recently, third-party research from two of the largest banks in the nation found that VantageScore 4.0 provides superior mortgage risk assessments than traditional credit score models and can be "a better indicator for cashout activity and credit performance."^¹ Both of the analyses were recently completed by comparing VantageScore 4.0 credit scores spanning 10 years and over 45 million loans released by Fannie Mae and Freddie Mac on July 11, 2024.

The advantages of VantageScore 4.0 for the mortgage industry include:

Predictive Power at the Forefront: Leveraging trended data and machine learning, VantageScore 4.0 offers lenders enhanced predictive performance, allowing for more accurate decision-making and helping mitigate risk while expanding approvals.
Millions More Borrowers: VantageScore 4.0 scores approximately 33 million additional consumers, including 4.1 million more minority borrowers (and 10 million total) with scores above 620. This expanded reach supports historically underserved communities in their pursuit of homeownership, promoting wealth-building opportunities and helping close the racial homeownership gap.
Fair and More Inclusive Credit Assessments: VantageScore's consumer-friendly approach includes alternative data such as rent, telecom, and utility payment data, offering a comprehensive and fair view of borrower creditworthiness. This enables lenders to make informed decisions with a complete picture of applicants' financial histories.

The Mortgage Resource Center underscores VantageScore's commitment to supporting mortgage lenders in adopting this transformative model and expanding access to mortgage finance for every creditworthy borrower.

For more information about VantageScore for Mortgage, please visit the VantageScore Mortgage Resource Center.

About VantageScore^®
VantageScore is the fastest-growing credit scoring company in the U.S., and is known for the industry's most innovative, predictive, and inclusive credit score models. In 2023, usage of VantageScore increased by 42% to more than 27 billion credit scores. More than 3,400 institutions, including 8 of the top 10 banks, use VantageScore credit scores to provide consumer credit products including credit cards, auto loans, personal loans and mortgages. The VantageScore 4.0 credit scoring model scores 33 million more people than traditional models. With the FHFA mandating the use of VantageScore 4.0 for Fannie Mae and Freddie Mac guaranteed mortgages, the company is also ushering in a new era for mortgage lending and helping to close the homeownership gap.

VantageScore is an independently managed joint venture company of the three Nationwide Consumer Reporting Agencies (NCRAs) – Equifax, Experian, and TransUnion.

^¹ Source: "The Score" Podcast, VantageScore.

SOURCE VantageScore