Fannie Mae and Freddie Mac’s regulator says VantageScore can now be used to underwrite home loans, weighing on FICO’s stock.

FICO (NYSE: FICO), global analytics software leader, today released a new white paper revealing that FICO® Score 10 T – the company’s most predictive and inclusive credit scoring model to date – overwhelmingly outperforms VantageScore 4.

The regulator of Fannie Mae and Freddie Mac wants to allow mortgage lenders to use an alternative credit score to FICO for borrower applications.

FICO is the first major credit score provider to incorporate BNPL information into its credit scores, the company said in a press release. But other leading credit score companies may follow FICO’s lead, bringing more clarity to a borrower’s use of lending solutions.

For years, lenders have used only the FICO score, from Fair Isaac Corp. — a metric that generally excludes such things as rent and utility payments. Since 2022, the FHFA has required lenders to use the FICO Score 10 T, a mortgage-specific grade that’s one of many scores issued by FICO.

Federal Housing Finance Agency director Bill Pulte announced that lenders may start using VantageScore, a rival to the Fair Isaac Corporation, the company behind the widely recognized FICO score, to assess creditworthiness for government-sponsored Fannie Mae or Freddie Mac mortgages.

Credit restoration expert Micah Smith cautions over buy now, pay later loan data hitting your credit report negatively and causing "some pretty large catastrophe."

The FICO European Fraud Map 2024 has revealed a worrying trend of rising card fraud levels and losses across the continent. The data from Euromonitor International on 18 countries shows that Card Not Present (CNP) fraud dominates card fraud losses and has increased across most countries.

There’s a reason the FHFA has long rejected so-called lenders choice. It isn’t a real win for competition and increases risk.

Effective immediately, Fannie and Freddie will allow mortgage lenders to use VantageScore credit ratings to assess creditworthiness.

MEPs raise alarm over media intimidation, political retaliation, and democratic backsliding, drawing parallels with Hungary’s trajectory.