Fannie Mae and Freddie Mac have expanded their approval of alternative credit scoring models for mortgage lending. Beginning in 2026, these government-sponsored enterprises now permit lenders to consider VantageScore 4.0 in addition to classic FICO scores when evaluating mortgage applications. This represents a broader rollout of a limited program that commenced in April, which had involved approximately 50 mortgage lenders.
VantageScore 4.0 differs from traditional FICO scoring by incorporating alternative data points not previously considered in mortgage evaluations, such as rental and utility payment histories. This inclusion could benefit homebuyers with limited credit histories, as consistent payment of rent or utilities may improve their creditworthiness assessment. Industry analysts suggest this expanded approach may increase approval rates and allow more applicants to access favorable interest rate terms. Data indicates that roughly one-third of mortgage denials for primary home purchases with conventional loans in 2025 were attributed to insufficient credit history.
Additional changes to mortgage credit evaluation are in development. The Federal Housing Administration announced plans to authorize mortgages underwritten using VantageScore 4.0 and FICO 10T beginning Jan. 1. The Federal Housing Finance Agency is also considering modifications to current lending procedures, including potential reductions in the number of credit reports required from the standard three to two, or even down to a single report. Such changes could reduce costs associated with credit report retrieval, though industry experts have raised concerns about the completeness of applicant financial assessments under such systems.
VantageScore and FICO employ comparable methodologies and data inputs to calculate credit scores on a 300-to-850 scale. However, consumer access to VantageScore 4.0 remains limited compared to FICO products, with free access available primarily through specific banking partners or paid services. Furthermore, while VantageScore 4.0 can evaluate rental payment history, only a small percentage of renters currently have that information reported to credit agencies, limiting the potential benefit for many consumers.
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