Summary:
- The Federal Housing Finance Agency (FHFA) has approved the use of VantageScore 4.0 for mortgages, which is a credit scoring model developed by the three major credit bureaus (Experian, Equifax, and TransUnion).
- This change is expected to lower the costs associated with credit checks for mortgage applications, as lenders will now have the option to use VantageScore 4.0 in addition to the traditional FICO score.
- The use of VantageScore 4.0 may also help to expand access to mortgage credit, as it may provide a more accurate assessment of a borrower's creditworthiness compared to the traditional FICO score.