FHFA Approves Use of New Credit Score Models by GSEs

On October 24, the Federal Housing Finance Agency (FHFA) approved two credit score models, the FICO 10T, and the VantageScore 4.0, for use by Fannie Mae and Freddie Mac. Additionally, the GSEs will require two, rather than three, credit reports from the national consumer reporting agencies. The latest announcement comes as the GSEs for over 20 years were accustomed to using solely Classic FICO scores. The agency has described the two scoring models as “more inclusive.” Both models will factor in new payment histories for borrowers when available, such as rent and utilities payments. The implementation, however, is expected to be a multiyear effort.

Read More.