New credit score models create a pathway for homebuyers

The Federal Housing Finance Agency recently announced the approval of two new credit score models, FICO10 and VantageScore 4.0, for use with Fannie Mae and Freddie Mac loans.

Both models will take into account the borrower’s rental history, utility payments, and telecom bills, in addition to the traditional FICO score. Federal Housing and Finance Agency Director Sandra L. Thompson said the new models “will improve accuracy and create a more inclusive approach to assessing borrowers.”

This change comes after decades of advocacy by the National Association of Realtors and other housing and banking industry leaders. A borrower’s ability to timely pay rent and utilities while balancing other budgetary requirements is a direct reflection of their ability to borrow and maintain a mortgage responsibly. Additionally, the accuracy of the FICO 10T and Vantage Score lowers risk while improving outcomes for borrowers, lenders, and the FHFA.

Currently, 70% of homeowners and 90% of all new mortgages are federally guaranteed. It is expected that the above changes will bring additional eligible buyers into the marketplace. Many of them have had years of on-time lease payments, but limited traditional credit histories.

Home ownership not only creates stability for an individual, but also for communities. Creating home ownership is the mission of Stark Trumbull area real estate agents and we look forward to the opportunity to help more people in Stark, Trumbull and Carroll counties purchase their new home.

Marlin Palich is President of Stark Trumbull Area Realtors, which serves Stark, Carroll and Trumbull counties. Visit for a complete list of Realtors and Affiliate Members. If you have questions or comments about this article, email [email protected]

Marlin Paliche