Credit Scores

U.S. Federal Housing (Federal Housing Finance Agency, FHFA), along with Fannie Mae and Freddie Mac (the Enterprises), is committed to regularly assessing and modernizing the credit score models used by mortgage lenders and other stakeholders in the housing finance system. This process is governed by the 2018 enactment of the Economic Growth, Regulatory Relief and Consumer Protection Act (Section 310) and the Validation and Approval of Credit Score Models Rule (12 CFR Part 1254), and is consistent with FHFA’s commitment to accuracy in credit scoring, as well as the safety and soundness of the Enterprises.

Recent Updates

U.S. Federal Housing is updating the implementation of newer, more advanced credit score models by the Enterprises. The Enterprises are moving forward with an interim phase in this initiative, in which they will permit lenders to deliver mortgage loans using a credit score generated by either the Classic FICO model or the VantageScore 4.0 model. This “lender choice” approach will introduce more robust competition in credit scoring while the Enterprises continue to work towards full implementation of modernized credit scoring and credit reporting.

Please see below for Frequently Asked Questions (FAQs) about the interim phase of the initiative. These FAQs will be updated regularly.

What policies are being updated by FHFA?

For decades, mortgage loans delivered to Fannie Mae and Freddie Mac (the Enterprises) have required credit scores, when available, from a single model – the “Classic FICO” model. Now FHFA is directing the Enterprises to permit lenders to choose between two approved credit score models – Classic FICO and VantageScore 4.0 – for loans sold to the Enterprises.

Why is FHFA pursuing these changes?

In 2018, President Trump signed into law the Credit Score Competition Act^[1], requiring FHFA to establish a process for the Enterprises to validate more advanced credit score models. In 2022, after extensive testing and review by the Enterprises, FHFA announced the validation of two new credit score models – VantageScore 4.0 and FICO 10T. These new models take into account additional sources of data, including rent payment history, and have the potential to accurately score many more Americans.

VantageScore 4.0’s implementation process has arrived at a point where the Enterprises soon can move forward with adoption of scores from the model. Similar implementation efforts are underway with respect to FICO 10T, and the Enterprises expect to be able to publish historical FICO 10T data and adopt scores from the model at a later date.

Providing lender choice among multiple approved credit score models should help consumers, lenders, and other market participants realize the benefits of robust competition, such as lowering closing costs. The introduction of newer credit score models will improve risk management throughout the market as well, because these new models are more predictive of default risk.

How does the introduction of VantageScore 4.0 impact other approved credit score models?

Classic FICO remains an approved credit score model that can be used for loans sold to the Enterprises. FICO 10T, which was validated and approved for use by the Enterprises alongside VantageScore 4.0 in 2022, remains an approved credit score model and is planned for future use by the Enterprises. Until then, lenders may choose between Classic FICO or VantageScore 4.0 for loans sold to the Enterprises.

Will lenders report credit scores from multiple models on a given loan?

Not initially. Lenders will have the choice to report credit scores from either Classic FICO or VantageScore 4.0. For the time being, the Enterprises will not accept scores from multiple models on a given loan.

Will lenders be able to report credit scores from multiple models across different loans?

Yes. To promote robust competition and provide further flexibility for consumers and lenders, the Enterprises will allow lenders to determine which credit score model to use on each loan they deliver. FHFA and the Enterprises will implement appropriate risk mitigants to ensure ongoing safety and soundness.

Will this result in changes to credit reporting requirements?

Not initially. The inclusion of VantageScore 4.0 credit scores will not change the Enterprises’ current credit reporting requirements (e.g., tri-merge/bi-merge credit reporting). By keeping these requirements as they exist today to the greatest extent possible, FHFA is seeking to minimize the cost and complexity of this transition.

What resources are available to assist in this transition?

In July 2024, the Enterprises released historical VantageScore 4.0 credit scores associated with a decade’s worth of loan acquisitions – spanning tens of millions of loans. This information has allowed stakeholders to better understand the score distribution and performance of the VantageScore 4.0 model. The historical VantageScore 4.0 credit scores can be accessed here and here.

Fannie Mae and Freddie Mac will also continue to update their coordinated implementation websites, which can be found here and here.

When will these changes take effect?

The Enterprises are completing the final steps for delivery of loans scored using VantageScore 4.0. The Enterprises will keep sellers/servicers and other market participants apprised of next steps. Each Enterprise will then update its Selling Guide policies; until then, existing Selling Guide and other requirements remain in place.

Will FHFA pursue further changes to the Enterprises’ credit score or credit reporting requirements?

FHFA continues to assess opportunities to lower costs for consumers, promote robust competition, and spur innovation – all while ensuring ongoing safety and soundness at the Enterprises.

Fannie Mae Credit Score Transition Page

Freddie Mac Credit Score Transition Page

Background

On October 24, 2022, FHFA announced the validation and approval of two new credit score models, FICO 10T and VantageScore 4.0, for use by the Enterprises. Once implemented, lenders will be required to deliver both FICO 10T and VantageScore 4.0 credit scores, when available, with each single-family loan sold to the Enterprises. The announcement followed a lengthy process of reviewing potential updates to the Enterprises’ credit score requirements, as required by statute and regulation. During this time, the Enterprises undertook rigorous testing of the models for which an application was received. Both of the newly approved models exceeded the required thresholds for accuracy, reliability, and integrity.

On October 24, 2022, FHFA also announced that the Enterprises would permit lenders to use either tri-merge credit reporting, in which credit reports from each of the three nationwide consumer reporting agencies are used, or bi-merge credit reporting, in which credit reports from two of the nationwide consumer reporting agencies are used. FHFA expects this update will promote competition in the market while supporting robust risk management.

On March 23, 2023, FHFA provided an update on the Enterprises’ implementation plans and opportunities for stakeholder engagement. FHFA and the Enterprises reiterated their commitment to working with stakeholders to ensure a smooth transition to the new credit scores and the new credit reporting requirements, in a manner that avoids unnecessary costs and complexity.

As part of the March announcement, FHFA and the Enterprises released a proposed timeline that was designed to elicit stakeholder feedback on various elements of the implementation of both the new credit score models and the updated credit reporting requirements. Additionally, the Enterprises conducted extensive outreach to stakeholders in the form of targeted discussions with a variety of market participants and engagement in industry conferences and webinars, as well as through a stakeholder survey, which generated nearly one thousand responses. Many of the themes identified by respondents included perspectives on the proposed timeline, the need for data to perform analysis of the new models and requirements, the importance of federal agency coordination, and views about mechanisms for FHFA and the Enterprises to receive feedback.

On September 11, 2023, FHFA announced the next phase of ongoing public engagement for the updated Enterprise credit score requirements. This engagement includes stakeholder forums and serves to identify a wide variety of issues, opportunities, and challenges related to successful implementation of the new requirements, including potential refinements to the timeline for adoption. Interested parties who wish to participate in this process should send their name, affiliation, and contact information to CreditScores@fhfa.gov.

On February 29, 2024, FHFA announced several updates related to the implementation of the updated Enterprise credit score requirements. Following extensive stakeholder input, FHFA amended the proposed implementation timeline to align the implementation of the bi-merge credit reporting requirement with the transition from the Classic FICO model. To better support market participants as they engage in this transition, FHFA further announced that the Enterprises would accelerate the publication of historical data specific to the VantageScore 4.0 model to early in the third quarter of 2024, while continuing to work towards publication of similar data to support the transition to the FICO 10T model.

On July 11, 2024, FHFA announced that the Enterprises released historical credit scores associated with the VantageScore 4.0 model on tens of millions of loans acquired beginning in April 2013, the earliest point at which trended consumer credit data is reliably available across the three nationwide consumer reporting agencies. This release will provide market participants the ability to better analyze and understand the VantageScore 4.0 model.

Resources

Public Engagement Process for Implementation of Credit Score Requirements

News Release: FHFA Announces Release of Historical Credit Scores by the Enterprises (7/11/2024)

News Release: FHFA Announces Key Updates for Implementation of Enterprise Credit Score Requirements (2/29/2024)

News Release: FHFA Announces Next Phase of Public Engagement Process for Updated Credit Score Requirements (9/11/2023)

News Release: FHFA Announces Public Engagement Process for Implementation of Updated Credit Score Requirements (3/23/2023)

Validation of FICO 10T and VantageScore 4.0​

News Release: FHFA Announces Validation of FICO 10T and VantageScore 4.0 for Use by Fannie Mae and Freddie Mac (10/24/2022)

Fact Sheet: FHFA Announcement of Credit Score Models (10/24/2022)

Validation of Classic FICO​

News Release: FHFA Announces Validation of Classic FICO by Fannie Mae and Freddie Mac (11/10/2020)

Joint Credit Score Solicitation

News Release: Fannie Mae and Freddie Mac Publish Joint Enterprise Credit Score Solicitation(2/18/2020)

Fannie Mae Credit Score Solicitation(2/18/2020)

Freddie Mac Credit Score Solicitation​ (2/28/2020)

Final Rule Resources

News Release: FHFA Publishes Final Rule on Credit Score Models(8/13/2019)

Final Rule: Validation and Approval of Credit Score Models (8/13/2019)

Fact Sheet: Validation and Approval of Credit Score Models - Final Rule (8/13/2019)

Proposed Rule Resources

Webinar Recording: Validation and Approval of Credit Score Models Proposed Rule(1/9/2019)

Webinar Transcript: Validation and Approval of Credit Score Models Proposed Rule (1/9/2019) 

Webinar Slide Presentation: Validation and Approval of Credit Score Models Proposed Rule (1/9/2019)  

Proposed Rule: Validation and Approval of Credit Score Models by the Enterprises (12/13/2018)

News Release: FHFA Issues Proposed Rule on Validation and Approval of Credit Score Models (12/13/2018)

FHFA Fact Sheet: Validation and Approval of Credit Score Models by the Enterprises (12/13/2018)

Decision to Shift Focus to Implementation of the Act

News Release: FHFA Announces Decision to Stop Credit Score Initiative (7/23/2018)

Infographic: Mortgage Industry Use of Credit Scores (7/23/2018)

Request for Input

News Release: FHFA Extends Deadline to March 30 for Request for Input on Fannie Mae and Freddie Mac Credit Score Requirements (2/2/2018)

FHFA Insights Blog: FHFA Needs Your Feedback on Credit Score Requirements (1/18/2018)

News Release: FHFA Issues Request for Input on Fannie Mae and Freddie Mac Credit Score Requirement (12/20/2017)

View Request for Input (Input was due March 30, 2018)

View Input Submitted (Select Credit Score in the pull down)​​