Mortgage lenders add new credit-score models: what it means for homebuyers

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Mortgage underwriting is shifting: regulators now allow lenders who sell loans to the government-backed giants to use alternative credit models, a change that could alter who qualifies for a home and what rate they pay. The move — announced April 22 — opens the door for scores that consider long-term payment patterns and, in some cases, reported rent and utility history.

The Federal Housing Finance Agency (FHFA) and the Department of Housing and Urban Development (HUD) said lenders will be allowed to use VantageScore 4.0 and, later, FICO 10T for mortgages that will be bought by Fannie Mae and Freddie Mac and for loans backed by the Federal Housing Administration. For prospective buyers, the change matters because the newer models use different data that can affect approval and pricing.

Who is adopting the new scores — and why it matters now

The FHFA said 21 large mortgage lenders are participating in the initial rollout of VantageScore 4.0, and Freddie Mac has already purchased about $10 million in loans under the new scoring approach, the agency said. HUD indicated the FHA will follow suit soon, expanding the pool of loans where these models can be used.

Practically, this means lenders will have options beyond the long-dominant FICO score when evaluating applicants. For some borrowers — particularly those with thin credit files or consistent rent and utility payments — the newer models could mean a mortgage approval or a lower interest rate. For others, including those who improve credit at the last minute, the outcome could change in unexpected ways.

Two score features that can shift outcomes

What sets the newer models apart are two elements not emphasized in the classic mortgage FICO:

Rent and utility reporting: VantageScore 4.0 and FICO 10T can factor in on-time rent or utility payments when that data reaches the credit bureaus. That can boost scores for consistent payers who lack other tradelines.

Trended data: These models look at payment behavior over time — typically the past 24 months — rather than a single balance snapshot. That helps distinguish habitual payers who clear balances each month from borrowers who carry revolving debt.

Both features are designed to give lenders a fuller picture of risk. But they depend on the underlying data being reported and available to credit reference agencies.

Reporting gaps limit immediate benefits for many renters

Experts caution that most renters still don’t have their rent or utilities automatically included in credit files. John Ulzheimer, a credit specialist and president of The Ulzheimer Group, noted that regular rent payments only help if a landlord or a third-party service sends that history to one of the three major bureaus — Equifax, Experian or TransUnion.

Some property managers already transmit rent data, and consumers can opt into rent-reporting services for a fee. TransUnion reported that the share of consumers with rent on file rose to about 13% last year from 11% the previous year, based on a March 2025 survey. By contrast, there are roughly 46.4 million renter households in the U.S., underscoring that most rent payments aren’t yet reflected in credit records.

Why trended data changes timing and strategy

Because trended data records balances and payments over months, it rewards sustained credit habits rather than last-minute fixes. Ulzheimer said that under the classic mortgage FICO, borrowers could boost a score quickly by paying down cards shortly before applying. With models that use trended data, lenders can see whether someone is a consistent payer — or a repeat revolver — across a longer timespan.

For applicants, that means start managing credit behavior earlier. Waiting until a month or two before applying may no longer be enough to change underwriting outcomes.

Key takeaways for homebuyers and renters

Check whether rent is being reported. Ask your property manager if they forward payment data to the credit bureaus or consider rent-reporting services if you want those payments reflected.

Track trended behavior. Keep consistent payment habits on credit cards and loans well before a mortgage application to benefit from models that evaluate long-term trends.

Expect lender variability. Some banks will continue to prefer classic FICO scores; others will adopt the new models. Outcomes may differ from lender to lender.

Monitor both types of scores. If you’re planning to apply for a mortgage soon, review your credit files and watch how different scoring models treat your data.

The policy change marks a meaningful shift in mortgage underwriting that could expand access for certain borrowers while raising new considerations about timing and documentation. As lenders begin using VantageScore 4.0 and move toward FICO 10T, borrowers should take stock of what’s on their credit reports and how long-term payment behavior is being recorded.

Regulators and mortgage firms say the rollout will continue in the coming months. Consumers who are house-hunting should speak with loan officers about which scoring models the lender uses and what documentation might improve their chances under the new rules.