Credit scoring models used for mortgages are shifting to evaluate up to 24 months of borrower payment history, and Fannie Mae has eliminated the minimum credit score requirement that has stood for decades. The changes, which began rolling out in late 2025 and accelerated through 2026, represent the most significant transformation in mortgage lending standards since the modern credit scoring era began.
Starting November 16, 2025, Fannie Mae removed its longstanding minimum 620 credit score requirement for loans processed through its Desktop Underwriter system. Instead of relying on a single credit score cutoff, lenders now evaluate borrowers using a holistic, risk-based assessment that considers multiple financial factors, according to the Fannie Mae Selling Guide Announcement released November 5, 2025.
The shift centers on two new credit scoring models: VantageScore 4.0 and FICO 10T. Both models analyze up to 24 months of trended data—a measurement of how borrowers manage credit over time rather than a snapshot of a single day. This extended timeline allows lenders to see whether borrowers are paying down balances or accumulating debt, and whether they’re making minimum payments or paying significantly more, according to analysis from Milliman released May 18, 2026.
A key feature of both new models is their incorporation of alternative credit data. VantageScore 4.0, which analyzes up to 24 months of trended data, helps lenders identify qualified borrowers with “thin” credit files while maintaining safety and soundness standards, according to Equifax’s June 9, 2026 announcement. The models now consider payment histories for rent, utilities, and telecommunications—data that never appeared in traditional credit reports. This change particularly benefits young adults, renters, immigrants, and others who manage money responsibly but lack extensive traditional credit card histories.
The Federal Housing Finance Agency and HUD jointly approved these models for use in FHA-insured mortgages and by Government-Sponsored Enterprises on April 22, 2026. Fannie Mae began accepting VantageScore 4.0 immediately, while FICO 10T was set to roll out in early 2026. By May 2026, over 500 mortgage lenders were already using VantageScore 4.0, according to Equifax.
The scale of the shift is substantial. VantageScore 4.0 scores 33 million more people than traditional credit models, according to a May 19, 2026 press release from VantageScore. The company estimates that approximately 5 million prospective homebuyers will benefit from the new credit modeling, according to analysis cited in Nadlan Capital Group’s December 23, 2025 report. Many of these borrowers previously couldn’t qualify for conventional mortgages because their credit histories didn’t fit traditional lending criteria.
While Fannie Mae and Freddie Mac have eliminated their minimum score requirements, credit scores themselves remain important. Better scores still qualify borrowers for lower mortgage rates, reduced lender fees, smaller down payments, and lower mortgage insurance costs. However, the elimination of hard cutoff points means lenders can now approve borrowers who would have been automatically rejected under the old 620-minimum rule. Individual lenders may still set their own minimum scores, so borrowers benefit from shopping multiple lenders to find those using the newer models.
The changes reflect broader recognition that traditional credit scoring misses important information about borrower reliability. As Vishal Garg of Better Mortgage explained in analysis cited by Nadlan Capital Group, the new models “reflect how people really earn and spend today” and provide “a much clearer view of a borrower’s true risk.” The shift enables a more inclusive mortgage market without sacrificing the safety standards that protect both lenders and the financial system.
Sources
- Equifax — Millions Could Gain Mortgage Eligibility with New Credit Scoring Models (June 9, 2026); confirmed VantageScore 4.0 analyzes up to 24 months of trended data and identifies borrowers with thin credit files
- National Mortgage Professional — Fannie Mae Ending Its Hard 620 Score Cutoff (November 11, 2025); confirmed minimum credit score requirement removal effective date
- HousingWire — Fannie Mae removes minimum credit score requirements (November 6, 2025); confirmed elimination of minimum credit score requirements from DU system
- Luminate Bank — Buying a Home Without a Credit Score? New Rules Make It Possible (November 14, 2025); confirmed minimum score requirements officially removed November 16, 2025, and holistic risk-based assessment approach
- Nadlan Capital Group — Understanding the New Mortgage Credit Score Changes for 2026 (December 23, 2025); detailed explanation of 24-month trended data, alternative credit data inclusion, and 5 million borrower benefit estimate
- Milliman — Analysis of credit bureau data and mortgage fit statistics for first-time homebuyers (May 18, 2026); confirmed both FICO 10T and VantageScore 4.0 incorporate trended credit data over 24-month window
- VantageScore — Large Mortgage Lenders Rapidly Switch to VantageScore 4.0 (May 19, 2026); confirmed VantageScore 4.0 scores 33 million more people than traditional models
- FHFA — Homebuying Advances into New Era of Credit Score Competition (April 22, 2026); confirmed approval of VantageScore 4.0 and FICO 10T for FHA-insured mortgages and GSE use
- Fannie Mae Selling Guide Announcement SEL-2025-09 — (November 5, 2025); confirmed minimum representative credit score requirement of 620 will be removed for new loan files
