The opinions printed in National Mortgage News (“Credit Scores Are Not the Issue” by Christopher Whalen; “Pulte’s palms credit score bureaus an unfair edge” by Chi Chi Wu), are incorrect and deceptive. Contrary to the views expressed in these items, competition and modernization within the mortgage credit score scoring system are considerably enhanced by VantageScore being allowed to compete by the FHFA. There merely isn’t any legitimate justification for preserving the now-abolished FICO monopoly for Fannie and Freddie mortgage credit score scores.
The use of VantageScore 4.0 reduces risk in the mortgage market. Multiple impartial analysis research printed over the previous yr by Bloomberg Intelligence, KBRA, Bank of America, JP Morgan Chase and others all attain the identical conclusion: VantageScore 4.0 is extra predictive than FICO Classic, and as much as 15% extra predictive in financial stress eventualities just like the COVID pandemic.
On a historic foundation, FICO Classic was the one credit score score in use in the course of the Global Financial Crisis. Yuliya Demyanyk of the Federal Reserve Bank of St. Louis reported that “FICO scores haven’t acted as a predictor” of default within the monetary disaster: default charges rose for each FICO class, and actually the rise in default charges was bigger in absolute phrases for higher-score debtors than for lower-score ones.
VantageScore 4.0 isn’t just a aggressive choice — it’s an unimaginable improve.
VantageScore has been and all the time might be pro-competition. This could be evidenced by our transparency in offering detailed overviews of our fashions, open entry to score associated information and the publication of 10 years of historic credit score score efficiency information from 2013 to 2023.
Contrast this with our competitor, which has not launched any information about its 10T credit score score mannequin for open market analysis, and continues to withstand and limit open competition. A letter to FHFA from the Structured Finance Association states, “We perceive that sure legacy contracts could impair or limit the flexibility of market individuals to undertake these comparisons and publish their findings.”
Competition breeds higher, extra predictive credit score scores. The backside line is that competition in mortgage credit score scoring isn’t elective — it is the regulation. The 2018 Credit Score Competition Act mandates it. Congress helps it, together with 23 members of the House Financial Services Committee who despatched a letter on July 18, 2025 encouraging instant implementation. The FHFA has permitted it and ordered the GSEs to implement VantageScore 4.0 efficient instantly. And most significantly, mortgage lenders, taxpayers and shoppers will profit from extra predictive and inclusive fashions.
The mortgage market’s well being is dependent upon innovation and openness and competition. Those who concern competition will fall additional behind. The remainder of us are prepared to maneuver ahead.
