Mortgage credit scores are evolving. What homebuyers need to know

Mortgage credit scores are evolving. What homebuyers need to know. 3 X post that FHFA is "seriously considering" reducing the number of credit reports and scores needed for lenders to evaluate a potential homebuyer to two and, the following day in a separate X post, said the agency is "also studying" the use of a single credit report in the mortgage application process.

What happened

0 could help potential homebuyers with thin credit histories to qualify for a mortgage or get a better interest rate, experts say. In this articleEXPGYFNMAFMCCEXPGYFollow your favorite stocksCREATE FREE ACCOUNTAnchiy | E+ | Getty ImagesWhen it comes to homebuyers' credit scores, changes are under way — and there could be more to come. John UlzheimerPresident of The Ulzheimer GroupNevertheless, for homebuyers with thin credit histories, having an alternative credit score used could mean a greater chance of getting more favorable mortgage terms.

0 uses data points that a classic FICO score doesn't consider, such as rent payments — which could help some homebuyers qualify for a mortgage or get a better interest rate on their loan, experts say. About a third of mortgage denials for primary home purchases with conventional loans in 2025 were due to a lack of credit history, according to Zillow's analysis of 2025 Home Mortgage Disclosure Act data. Another newer credit score model, FICO 10T, which uses similar alternative data, is expected to be approved for use in mortgages by FHFA in the coming months.

Currently, lenders are required to do a so-called tri-merge, which involves getting data about a mortgage applicant from all three large credit-reporting companies: Equifax, Experian and TransUnion.

The wider picture

Because there are differences in the credit scores that each firm provides, lenders typically use the middle score in their calculation. watch nowVIDEO0:3100:31Making home buying easierPersonal FinanceWhile a bi-merge, as it's called, potentially could reduce the cost of pulling credit reports — which has risen sharply in the past several years — it would create a new problem, said John Ulzheimer, a credit expert and president of The Ulzheimer Group in Atlanta. While trended data is already included in consumer credit reports, it has not been incorporated into the classic FICO score used in mortgages.

For consumers, this means managing credit card debt over time will be important if they plan to apply for a mortgage, he said. Mortgage lenders that work with Fannie Mae and Freddie Mac, government-sponsored enterprises, have the green light to use VantageScore 4. 0 if they want to. 0 in the mortgage application process has now been expanded for use in all mortgages that are sold to Fannie Mae and Freddie Mac. The Federal Housing Finance Agency, which oversees Fannie and Freddie, may also move to requiring fewer than three credit reports to be pulled, which is currently the mandate.

After decades of allowing lenders to only factor a "classic" score from provider FICO into their decision to extend a loan, Fannie Mae and Freddie Mac — government-sponsored enterprises that purchase mortgages and then bundle and sell them to investors — are now also permitting them to use VantageScore 4. 0, a score from credit bureaus Equifax, Experian and TransUnion.

What has been reported

The change applies to all mortgages sold to Fannie and Freddie. This is an expansion of a limited rollout, announced in April, which involved about 50 mortgage lenders, according to a Sept. Separately, the Federal Housing Administration will begin insuring mortgages underwritten with VantageScore 4. FHFA may reduce credit report requirementsAdditionally, Pulte said on his Sept. "Not all credit reports are the same, and [the lender] may miss something by not pulling all three," Ulzheimer said. 0 differs from the classic FICO score in several ways, including by considering rent and utility payments when evaluating a person's creditworthiness.

The idea is that some consumers may consistently pay those bills on time, and their score could benefit from that — especially if they don't have much else on their credit report, such as credit cards or an installment loan, for instance. "I do think it's going to be a benefit to buyers in terms of not just being able to be qualified, but also what interest rate bucket they fall in," said Stephen Rinaldi, president and founder of the Rinaldi Group, a mortgage broker based near Philadelphia.

What happens next

While a potential homebuyer can ask their mortgage broker or lender to check their VantageScore 4. 0 as well as their classic FICO score, it may not be easy for consumers to check those scores on their own ahead of time. 95 per month, both of which include classic FICO scores, as well as FICO 10T. 0 is available for free if you have an account through Synchrony Bank, a retail credit card provider. 0 considers rental history, most of that data doesn't make its way to credit companies for use in any score.

The share of consumers whose rent payments are reported to credit reporting agencies rose to 13% last year from 11% in 2024, according to a TransUnion report that was based on a survey of 2,006 adults in March 2025. Personal FinanceSome property managers use software to feed data to one or more credit bureaus.

The report has been compiled by The Daily Waves using information reported across cnbc.com, bbc.co.uk. Details are presented according to the information available at the time of publication and may change as authorities, organisers or other relevant parties provide updates.