Overview

• Effective July 8, FHFA Director Bill Pulte’s order lets lenders use VantageScore 4.0 for Fannie Mae and Freddie Mac loans without new infrastructure requirements.
• The policy breaks FICO’s decades-old monopoly in underwriting government-backed mortgages and builds on efforts to reduce mortgage closing costs.
• Fair Isaac Corporation’s shares plunged over 17% after the announcement while Equifax, Experian and TransUnion saw modest upticks.
• VantageScore 4.0 integrates rent and utility payment data to better assess borrowers with limited or no traditional credit histories.
• Experts warn that lenders’ minimal experience with VantageScore could slow its uptake despite the policy’s immediate effect.