Credit scoring is undergoing its most significant modernization in decades, as the Federal Housing Finance Administration and the Department of Housing and Urban Development announced in April 2026 that mortgage lenders can now use VantageScore 4.0 and FICO 10T—the first new credit models approved for mortgages since the early 1990s. The shift marks a historic shift away from the single-model system that has dominated lending for over three decades.
The new models incorporate trended and alternative credit data, including rent payments, utility bills, and telecommunications payments, alongside traditional credit history. VantageScore 4.0, developed by the three major credit bureaus, analyzes up to 24 months of payment trends to build what Equifax describes as a “360-degree” view of a borrower’s financial profile. This expanded data allows lenders to evaluate creditworthiness more comprehensively than traditional models, which relied primarily on credit card and loan payment history.
The practical impact is immediate: millions of Americans who previously couldn’t qualify for mortgages now have a pathway to homeownership. VantageScore 4.0 can score approximately 10 million more veteran and rural borrowers who were left out of traditional scoring systems, according to VantageScore. Equifax noted that the shift could enable access for millions of borrowers with “thin” credit files—those with limited credit history but a solid record of paying rent and utilities on time.
On April 22, 2026, the Federal Housing Administration, Fannie Mae, and Freddie Mac jointly announced they would permit and accept the new models for FHA-insured mortgages and conventional loans. FHFA Director William J. Pulte stated in the announcement that the agency was “modernizing credit scoring with more predictive models, helping millions of Americans who responsibly pay rent qualify for mortgages.” Fannie Mae and Freddie Mac immediately began accepting VantageScore-scored loans from approved lenders, with both updating their selling guides to reflect the change.
The modernization is also designed to foster competition and reduce costs. Equifax is offering VantageScore 4.0 at $1 through the end of 2027 to accelerate lender adoption, and the company reported that as of May 2026, over 500 mortgage lenders were already using the new model. The shift away from a monopoly on credit scoring is expected to drive down mortgage acquisition costs and provide lenders with more flexibility in evaluating borrowers.
Predictive accuracy has improved significantly under the new models. VantageScore 4.0 identifies 49% more mortgage defaults than the older FICO Classic model, according to VantageScore’s own analysis, enhancing lenders’ ability to assess risk. Both new models are built on the premise that payment history across all bill types—not just credit accounts—reveals a borrower’s financial responsibility and likelihood of repaying a mortgage.
The change does not eliminate traditional FICO scores entirely; lenders maintain the option to continue using Classic FICO models if they choose. However, the approval of VantageScore 4.0 and FICO 10T represents a deliberate policy shift toward what the mortgage industry calls “credit score competition”—a movement to break decades of reliance on a single scoring methodology. The shift is part of the broader implementation of the Credit Score Competition Act of 2018, which authorized the use of alternative credit models in government-backed mortgage lending.
Sources
- Federal Housing Finance Agency (FHFA) — April 22, 2026 announcement of VantageScore 4.0 and FICO 10T adoption for mortgages; statement from Director William J. Pulte on modernizing credit scoring.
- Equifax — June 9, 2026 newsroom article on millions gaining mortgage eligibility with new scoring models; details on VantageScore 4.0 incorporating alternative data and trended information; information on $1 pricing offer and lender adoption rates.
- VantageScore — Data on 10 million additional veteran and rural borrowers eligible under VantageScore 4.0; statistic on identifying 49% more mortgage defaults than FICO Classic.
- ABA Banking Journal — April 22, 2026 coverage of HUD and FHFA rollout of new credit scoring models for mortgages.
