Latest news with #FICO10T
CNBC
31-07-2025
- Business
- CNBC
FICO CEO defends credit score pricing amid FHFA criticism, says cost isn't blocking home ownership
In a Thursday interview with CNBC's Jim Cramer, Fair Isaac CEO Will Lansing pushed back against recent criticism of his company, saying FICO credit score pricing isn't an issue for home owners. "We have been accused of raising our prices, and it's true, we have, but they're still very, very small relative to what we offer," Lansing said. "We charge $4.95 for a mortgage score out of $6,000 in closing costs. So it's not the cost of a FICO score that' problems for home ownership." In May, Bill Pulte, the newly-appointed head of the Federal Housing Finance Agency, chastised Fair Isaac for its price hikes. Pulte later announced that mortgage lenders can now choose to use a traditional FICO score or one from rival VantageScore to evaluate borrowers. Previously, mortgage lenders selling loans to Fannie Mae and Freddie Mac — government-sponsored enterprises that back the majority of residential mortgages in the U.S. — were only allowed to use FICO scores. Pulte later went on to disparage Fair Isaac as a "monopoly who has ripped off Americans for decades." FICO said in a statement that the new policy "introduces a dangerous precedent that increases adverse selection risk" and "inexplicably favors a less predictive credit score that will undermine the safety and soundness of the enterprises and their counterparties." Lansing reiterated his company's statement, telling Cramer "there's all kinds of safety and soundness concerns" with the FHFA's actions. According to Lansing, Fair Isaac has been competing with Vantage for 15 years and "we always win," touting the widespread use of the traditional FICO model. He also said Fair Isaac's new credit score model, FICO 10T, outperforms the classic model and that of VantageScore. "We have over 90% market share in all these other markets that have nothing to do with the government," Lansing said. "And then within the mortgage market, in the non-conforming market where there's no government mandate, FICO is the clear industry standard." Click here to download Jim Cramer's Guide to Investing at no cost to help you build long-term wealth and invest
Wall Street Journal
16-07-2025
- Business
- Wall Street Journal
A Risky Race to the Bottom on Housing Credit
Your editorial 'How to Increase Mortgage Defaults' (July 10) is correct: The use of a score with less rigorous credit criteria than FICO's would put the safety and soundness of the $12 trillion U.S. mortgage market at risk. VantageScore's model is more 'inclusive' because it asks for less. It has given scores to people with limited credit history, in some cases, as little as one month. Like VantageScore 4.0, FICO 10T incorporates rental- and utility-payment data when available, but FICO doesn't reduce its credit-scoring criteria. With its superior predictiveness, FICO 10T qualifies 5% more borrowers and reduces credit defaults by 17% than our current models. It is only by improving predictiveness that we can safely expand credit access.
Newsweek
10-07-2025
- Business
- Newsweek
What to Know About VantageScore: New Credit Rating For Mortgages
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Americans now have a new credit option to use when applying for a mortgage, and it allows them to use their rent payments as a qualifying factor. President Donald Trump's administration announced this week that mortgages sold to Fannie Mae and Freddie Mac will now accept the use of VantageScore 4.0 credit scores when determining loan qualifications. Why It Matters By opening up the VantageScore credit rating to qualify for a mortgage, more Americans will likely be able to be approved and subsequently purchase homes than before. The housing market has become increasingly unaffordable for the everyday American, with home prices nationwide up 0.6 percent year-over-year in May, and the median sale price set at $440,910. Mortgage rates have also exacerbated this trend, hovering in the high six percent range. A house's real estate for sale sign is seen in front of a home in Arlington, Virginia, November 19, 2020. A house's real estate for sale sign is seen in front of a home in Arlington, Virginia, November 19, 2020. SAUL LOEB/AFP via Getty Images What To Know Americans will now be able to use the VantageScore credit score to qualify for home loans, which means rent will count as a qualifying factor to be approved for a mortgage. The VantageScore 4.0 credit score ratings will now be accepted in place of the FICO 10T model, enabling all rent and utility payments to be used in the calculation of your credit score. "VantageScores are considered more flexible than traditional credit scores. They incorporate both financial and non-financial data—like utility and rent payments—to help establish creditworthiness, especially for individuals with limited credit history," Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. "This opens the door for more people to be seen as creditworthy in the eyes of lenders." Bill Pulte, director of the Federal Housing Finance Agency (FHFA), said on X that the new order "will allow for Americans to use their RENT to qualify for a mortgage." "Credit history will no longer just include credit cards and loans," he wrote. "This is HUGE." Moving forward, the MBA said it will work with the Federal Housing Finance Agency to address the "numerous implementation questions that are necessary to realize these benefits as well as the continued conversations around credit reporting competition. Will This Lead to a Boom In Home Buyers? While more borrowers will be able to qualify for mortgages as a result of their VantageScore, there's still a possibility that lenders will approach these credit ratings with caution, Thompson said. "Even if the VantageScore appears solid, financial institutions may still view these borrowers as higher risk and compensate by charging higher interest rates," Thompson said. "So while this is a step in the right direction, it may come at a cost—access, yes, but potentially at higher borrowing rates." What People Are Saying Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "The inclusion of non-traditional data in VantageScores could be a positive shift for housing. It allows more borrowers—especially those with thin credit files—to qualify for mortgages by recognizing payments they're already making, like rent and utilities. That could expand access to credit and increase homeownership potential." A spokesperson for the Mortgage Bankers Association (MBA) previously told Newsweek: "MBA has consistently advocated for increased competition in credit reporting and scoring and welcomes reforms that will lower costs for consumers. FHFA's announcement to allow lenders to have a choice of credit score models to use when delivering loans to Fannie Mae and Freddie Mac could help to accomplish the goals of added competition in the credit score space and reduced consumer costs, if implemented correctly." Daryl Fairweather, chief economist for Redfin, said on X: "FHFA's approval of VantageScore is a win for competition, as it breaks FICO's monopoly on credit scores for conventional loans. This should lead to lower costs for lenders, but it's unclear if those savings will reach homebuyers in the form of lower closing costs." What Happens Next The details around how rental payment data will be reported and used is still unclear, but there could be long term effects when it comes to the housing market. "This could be a huge boost for some borrowers, as the ability to make these monthly cost-of-living payments could enhance the score usually just associated with debt. At the same point, parts of the decision are still unclear, and it remains to be seen how it will impact the housing market," Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. "Obviously, the goal is to get more borrowers to qualify for a mortgage, but just how making bill payments will dramatically do so is still a work in progress."
Newsweek
09-07-2025
- Business
- Newsweek
Trump Administration Announces 'Huge' Change To Help New Homebuyers
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The Trump administration announced a change for prospective homebuyers that could allow their rent payments to qualify for a mortgage. A spokesperson for the Mortgage Bankers Association (MBA), a group representing mortgage brokers, told Newsweek that if implemented correctly, the policy could "accomplish the goals of added competition in the credit score space and reduced consumer costs." Newsweek reached out to the Federal Housing Finance Agency for comment via email. Why It Matters The announcement comes as the housing costs remain high across the country. In June 2025, the national median listing price was $440,950—up 0.2 percent from last year—according to data from These historically high housing prices have locked potential homebuyers out of the market, critics say. The administration's move could make it easier for first-time buyers to secure a loan, proponents say. A row of houses in Charlotte, North Carolina on June 14, 2014. A row of houses in Charlotte, North Carolina on June 14, 2014. bauhaus1000/iStock via Getty Images What To Know Bill Pulte, director of the Federal Housing Finance Agency (FHFA), announced on X, formerly Twitter, a new order that "will allow for Americans to use their RENT to qualify for a mortgage." "Credit history will no longer just include credit cards and loans," he wrote. "This is HUGE." The change is specifically that mortgages sold to Fannie Mae and Freddie Mac will now accept the use of VantageScore 4.0 credit scores in determining loan qualifications in lieu of the FICO 10T model. The VantageScore model differs in that it accounts for rent and utility payments in terms of its calculation. The MBA spokesperson, in a statement to Newsweek,said there are still questions about the program before its implementation can begin, but that it could be beneficial to consumers. "MBA has consistently advocated for increased competition in credit reporting and scoring and welcomes reforms that will lower costs for consumers. FHFA's announcement to allow lenders to have a choice of credit score models to use when delivering loans to Fannie Mae and Freddie Mac could help to accomplish the goals of added competition in the credit score space and reduced consumer costs, if implemented correctly," the statement reads. The MBA will work with the FHFA to address the "numerous implementation questions that are necessary to realize these benefits as well as the continued conversations around credit reporting competition," according to the statement. Silvio Tavares, president and CEO of VantageScore, touted the change as one that will promote "efficiency and affordability for creditworthy Americans" in a press release. "Under Director Pulte's leadership, the FHFA's long-expected decision to accept VantageScore 4.0 will revolutionize the American mortgage market and grant millions of creditworthy Americans the golden opportunity to own their homes," Tavares said. What People Are Saying Bill Pulte, director of the Federal Housing Finance Agency, on X: "Effective today, to increase competition to the Credit Score Ecosystem and consistent with President Trump's landslide mandate to lower costs, Fannie and Freddie will ALLOW lenders to use Vantage 4.0 Score with no current requirement to build new infrastructure [stays Tri Merge]." Senator Jim Banks, an Indiana Republican, on X: "Buying a home is a key part of the American dream. Glad to see @pulte making that happen." Shannon McGahn, executive vice president and chief advocacy officer for the National Association of Realtors, in a statement: "This is a major step toward a more accurate and equitable mortgage underwriting process, one that considers timely rent, utility, and telecom payments as indicators of creditworthiness. These are real-world factors that show how people pay their bills and should count when determining if someone qualifies for a mortgage." Daryl Fairweather, chief economist for Redfin, on X: "FHFA's approval of VantageScore is a win for competition, as it breaks FICO's monopoly on credit scores for conventional loans. This should lead to lower costs for lenders, but it's unclear if those savings will reach homebuyers in the form of lower closing costs." What Happens Next The specifics of implementation—how rental payment data will be reported, verified and weighed in mortgage decisions—remain to be clarified. It's unclear whether lenders will immediately began using VantageScore.
