Buying a home is one of life’s biggest steps, and every dollar saved counts. That’s why recent news from the Federal Housing Finance Agency (FHFA) is such a win for future homeowners.
🏡 Homebuyers win big: FHFA now allows lenders to use VantageScore 4.0 along with Tri-Merge credit reports.
💸 Goal: Lower mortgage costs & boost access - especially for those with limited credit or in rural areas.
📅 Effective: July 8.
The announcement was made by William J. Pulte, director of the FHFA, on his X account.
What Is VantageScore 4.0?
VantageScore 4.0 is a cutting-edge credit scoring model launched in 2017 by Equifax, Experian, and TransUnion. It uses machine learning to assess credit risk - ideal for consumers with limited credit history. Scores ~33M more people than traditional models, helping more qualify for loans without easing lending standards.
Why This Matters to HomeBuyers
If you’re thinking about buying a home, getting your credit checked is a major first step. But in recent years, the cost of a full credit report (known as a Tri-Merge) has skyrocketed - from about $15 in 2010 to over $100 today. Those rising costs have made the mortgage process more expensive, especially for first-time buyers who are still exploring their options.
By allowing VantageScore 4.0 to be used alongside Tri-Merge reports, the FHFA hopes to increase competition, lower the cost of credit checks, and make homeownership more accessible, especially for renters, rural buyers, and those who have thin credit files.
Better for HomeBuyers with Limited Credit History
Millennials and Gen Z buyers often have fewer credit accounts, making it harder to get a good credit score under traditional models. VantageScore 4.0 changes that by recognizing alternative data like rent payments and excluding paid medical collections from your credit history. That gives more buyers a chance to qualify for affordable home loans.
As FHFA Director William J. Pulte explained, “We are expanding credit access to millions of forgotten Americans - people who live in rural areas, renters who pay their rent on time every month - and bringing down closing costs.”
What HomeBuyers Should Know Next
While this change is brand new, it’s a big step forward for anyone thinking about applying for a mortgage. It may give you more options, lower upfront costs, and a better shot at qualifying, especially if you’ve had trouble in the past due to limited credit history.
At Loan Factory, we’re here to help you take full advantage of these changes. Whether you're just starting your homebuying journey or ready to apply, our team is ready to guide you through a smarter, simpler mortgage process.
Ready to explore your options? Contact Loan Factory today and let’s talk about how this new credit scoring model could work for you.
Visit www.loanfactory.com today to get started.
