More Data Means More Creditworthy Mortgages with VantageScore 4.0 versus FICO 10T

• Over 5 Million Creditworthy Mortgages Excluded from the New Fannie and Freddie Historical Mortgage Data Set Due to FICO’s Obsolete Methods
• VantageScore 4.0 Includes 5 Million More Creditworthy Mortgages Compared to 10T, a $1 Trillion Origination Opportunity for Mortgage Lenders
• Incrementally Scored VantageScore 4.0 Borrowers Demonstrate Comparable Risk Versus Legacy and Existing Mortgage Borrowers

SAN FRANCISCO--(BUSINESS WIRE)--A new analysis confirms VantageScore 4.0 leverages traditional and alternative data more effectively to create a precise view of consumer mortgage risk and credit scores for millions more consumers when compared to FICO 10T. The study, titled More Data Means More Creditworthy Mortgages: How VantageScore 4.0 Enables Lenders to Serve Millions More Creditworthy Borrowers than FICO 10T, examines how VantageScore’s advanced credit modeling techniques and broader data sets help bring millions of creditworthy consumers forgotten by FICO into the mainstream financial system. These additional consumers include 5 million more borrowers entering the mortgage market, representing an origination opportunity for lenders of up to $1 trillion. Incrementally scored VantageScore mortgage consumers have a risk profile equal to that of existing consumers scored by FICO Classic and FICO 10T.

“Millions of consumers remain forgotten by FICO Classic and FICO 10T credit scoring models, not because they lack creditworthiness, but because FICO’s legacy systems rely on narrow, obsolete criteria,” said Dr. Andrada Pacheco, EVP and Chief Data Scientist at VantageScore. “Our findings show that lenders do not have to choose between expanding access to creditworthy consumers versus compromising risk prediction. VantageScore 4.0 delivers both increased access to creditworthy mortgage consumers while maintaining risk safety and soundness.”

The new historical data sets released Friday include only mortgages previously underwritten under FICO's obsolete criteria, which exclude any consumer who has not had a trade account with credit history and activity in the prior 6 months. These legacy criteria exclude over 5 million creditworthy consumers, including veterans returning from active duty, many farmers, and affluent consumers who have chosen not to use credit in the last 6 months. The newly published VantageScore study provides a modern, data-driven credit score to these creditworthy consumers who have been excluded from the Fannie Mae and Freddie Mac data set. The study also quantifies the benefits of including these consumers in the mortgage system.

Key findings from the study include:

• OVER 5 MILLION CREDITWORTHY MORTGAGES EXCLUDED FROM THE FANNIE AND FREDDIE HISTORICAL MORTGAGE DATA SET DUE TO FICO’S OBSOLETE METHODS: The recent implementation of VantageScore 4.0 by the FHFA and inclusion of legacy-unscored populations facilitates access to homeownership. Almost 5 million additional creditworthy consumers gain access to the mortgage market with VantageScore 4.0.

• VANTAGESCORE 4.0 INCLUDES 5 MILLION MORE CREDITWORTHY MORTGAGES COMPARED TO 10T, A $1 TRILLION ORIGINATION OPPORTUNITY FOR LENDERS: The addition of 5 million more consumers entering the mortgage market, enabled by the implementation of VantageScore 4.0, represents an origination opportunity of up to $1 trillion.

• INCREMENTALLY SCORED VANTAGESCORE 4.0 BORROWERS DEMONSTRATE COMPARABLE RISK COMPARED TO BORROWERS WITH LEGACY MORTGAGE ACCESS: Incrementally scored VantageScore mortgage consumers have a risk profile equal to that of existing consumers scored by FICO Classic and FICO 10T.

Download the whitepaper here.

Don’t get left behind—start lending to more high-growth potential, creditworthy borrowers by adopting VantageScore 4.0 now. More information for interested lenders is available at the VantageScore website.

About VantageScore®

VantageScore is the fastest-growing credit scoring company in the U.S., and is known for the industry’s most innovative, predictive and inclusive credit score models. In 2024, usage of VantageScore increased by 55% to hit 42 billion credit scores. More than 3,700 institutions, including nine of the top 10 U.S. banks, use VantageScore credit scores and digital tools to provide consumer credit products or generate greater insights into consumer behavior. The VantageScore 4.0 credit scoring model scores 33 million more people than traditional models. With the FHFA allowing the immediate use of VantageScore 4.0 for Fannie Mae and Freddie Mac guaranteed mortgages, the company is also ushering in a new era for mortgage lending.

VantageScore is an independent joint venture company owned by Equifax, Experian and TransUnion.