Overview
- The Federal Housing Finance Agency announced on Sept. 29 that Fannie Mae and Freddie Mac will move to a single mortgage-pricing grid that treats VantageScore 4.0 alongside FICO Classic.
- Rocket Mortgage said it will default to VantageScore 4.0 for eligible loans starting in the fourth quarter, a move that could prompt other large lenders to follow.
- Investors reacted sharply as FICO shares plunged roughly 20% in early trading with intraday drops reported nearer 29%, and smaller declines hit Equifax and TransUnion while Rocket Cos. stock rose.
- VantageScore 4.0 uses additional signals such as rent and utility payments that can raise scores for people with thin credit files but lenders and securitizers must recalibrate underwriting and pricing to use it reliably.
- The shift ends decades of de facto FICO exclusivity and is likely to pressure per-pull pricing and FICO revenue over months as scoring fees, lender systems, and mortgage models are renegotiated and updated.