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annie Mae and Freddie Mac will now accept VantageScore 4.0 for mortgage underwriting, either alongside or in place of traditional FICO scores. This change, effective immediately, gives potential homebuyers an extra boost that can qualify them for a mortgage or reduce the cost of the loan.

    VantageScore 4.0 is a newer model developed by Equifax, Experian, and TransUnion, which analyzes changes in credit data over time and includes additional data points such as rental, utility, and telecom payments. This allows borrowers to be rewarded for making timely payments, even if they have limited credit history.

    The National Association of REALTORS praises the decision as a win for real estate professionals and consumers. The modernization of the credit scoring system will help borrowers gain access to a competitive housing market. NAR Executive Vice President Shannon McGahn says, "This is a major step toward a more accurate and equitable mortgage underwriting process that considers timely payments on rent, utilities, and telecom bills as indicators of creditworthiness."

    Expanding the number of acceptable credit scoring models will foster competition in credit reporting, lowering costs, increasing accuracy, and helping more qualified Americans achieve homeownership. NAR will continue to work with the Federal Housing Finance Agency and Congress to bring further updates to credit scoring, giving more qualified borrowers the opportunity to buy a home.