Mortgage Credit Scoring Is Changing: What Oklahoma Homebuyers Should Know
Mortgage credit scoring may be entering one of its largest periods of change in decades. The Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to expand the availability of VantageScore 4.0 to approved mortgage lenders. At the same time, federal officials are considering changes to the traditional practice of obtaining information from all three national credit bureaus. Those headlines sound dramatic, but buyers need to understand the difference between a policy announcement and complete lender implementation. What is VantageScore 4.0? VantageScore 4.0 is an alternative to the classic FICO models traditionally used in mortgage lending. It evaluates credit information differently and can use trended credit data, which looks at how balances and payments change over time. When information such as rental payments is reported to a credit bureau, the model may also consider that history. This could be helpful for some consumers who responsibly pay rent but have limited t...