The Biggest U.S. Banks Find VantageScore 4.0 is a Quantitatively "Better" Credit Score for Mortgages

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Oct 29, 2024, 08:00 ET

SAN FRANCISCO, Oct. 29, 2024 /PRNewswire/ -- VantageScore, a leading national credit-scoring company, is the "better" credit score for mortgages according to leading U.S. banks. Recently, third-party research from those banks found that VantageScore 4.0 provides superior risk assessments than traditional credit score models and can be "a better indicator for cashout activity and credit performance." The analyst report was featured on The Score Podcast from VantageScore¹.

These 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.

In addition to the banks' independent research, VantageScore 4.0 has recently been adopted by leading Government-Sponsored Entities (GSEs) for mortgage use. This includes:

Federal Home Loan Bank of San Francisco (March 2024)
Federal Home Loan Bank of Chicago (June 2024)
United States Veterans Administration (September 2024)
Federal Home Loan Bank of New York (October 2024)

VantageScore has rapidly expanded its footprint to be one of the most innovative and inclusive credit scoring models in the market. VantageScore's recent growth includes:

8 of the Top 10 Banks Use VantageScore - VantageScore is used by 8 of the top 10 banks nationwide and by more than 3,400 financial institutions
42% Annual Growth - Usage of VantageScore credit scores grew 42% in 2023 to more than 27 billion scores
172% Growth in Credit Cards - In 2023, growth of VantageScore credit scores by financial institutions increased by 46%, and usage among credit card lenders surged 172%.

"The Federal Housing Finance Administration (FHFA) mandated VantageScore 4.0 for mortgages guaranteed by Fannie Mae and Freddie Mac pursuant to the 2018 Federal Credit Score Competition Act. VantageScore 4.0 exhibits superior inclusive and predictive power, and provides lenders with a highly predictive, consistent, and fair credit scoring model," said Tony Hutchinson, Senior Vice President and Head of Government and Industry Relations for VantageScore.

To learn more about migrating to VantageScore 4.0, visit our Mortgage homepage.

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 and owners include the three Nationwide Consumer Reporting Agencies (NCRAs) – Equifax, Experian, and TransUnion.

¹ "The Score" Podcast, https://www.youtube.com/watch?v=iPgilo13Gz8

SOURCE VantageScore