VantageScore 4.0 Goes Mainstream: What It Means for Your Borrowers

As of July 1, 2025, mortgage professionals across the country are stepping into a new credit landscape. Fannie Mae and Freddie Mac have officially begun accepting VantageScore 4.0 for loan eligibility decisions—marking the first time a model other than FICO will be used by the GSEs.

If you’re an active MLO, this is more than just a change in credit models—it’s a shift in who you can help qualify. And for many borrowers sitting on the sidelines due to limited credit history, it’s a long-awaited opportunity.

Let’s break down what this means for your day-to-day, your pipeline, and your clients.

What is VantageScore 4.0—And Why Now?

VantageScore 4.0 isn’t new, but its mainstream acceptance is. Developed by the three major credit bureaus (Equifax, Experian, and TransUnion), this model has been around since 2017, but lacked traction in the mortgage space—until now.

Here’s why FHFA made the move:

• Greater inclusivity: VantageScore can score 37 million more consumers than traditional FICO models.

• Trended data use: It looks at how consumers manage credit over time (not just a snapshot).

• Expanded data sources: VantageScore 4.0 incorporates rent, utility, and telecom payments—critical for thin-file borrowers.

• Predictive performance: Testing shows it’s just as predictive (if not more so) than legacy FICO models.

What Mortgage Professionals Need to Know

So what changes in your world as an MLO?

1. Two credit models will now be used side-by-side.
Fannie Mae and Freddie Mac will require both FICO and VantageScore to be pulled for underwriting during this transition period. That means you’ll see two scores per borrower—and likely need to coach clients on both.

2. Mortgage clients may now qualify.
This is big. Borrowers with little to no traditional credit history–but consistent rent or utility payments–can now be scored and approved. That opens the door for:

• First-time homebuyers

• Gig workers and freelancers

• Clients recovering from past credit issues

• Younger applicants with non-traditional credit activity

3. Education will be your new superpower.
Expect more borrower questions—”Why do I have two scores?” “Which one matters more?” As their advisor, your ability to explain the differences between VantageScore and FICO clearly and confidently can build trust and loyalty.

Real Impact on Borrower Qualification

Let’s say you’ve got a client, Amanda, who’s been renting for five years, always on time. She pays her phone and utilities like clockwork, but has never had a credit card.

Under FICO? She’s invisible.

Under VantageScore 4.0? She might score above 680–putting her well within qualifying range.

These are the kinds of stories you’ll start seeing more often–and they’re the ones that give MLOs like you a serious competitive edge.

What This Means for Your Pipeline

If you’re focused on volume or underserved markets, this is your green light. Use this update to:

• Re-engage previously unqualified leads.
  Reach out to clients who fell short due to credit history alone.

• Market your expertise on social or email.
  Let clients know you’re up-to-date and ready to help with today’s standards.

• Strengthen referral relationships.
  Realtors love loan officers who say yes more often.

Pro Tip: Update your intake process or pre-qualification messaging to highlight your use of VantageScore when applicable.

How to Stay Ahead of the Curve

While the implementation will roll out over time, staying educated is the best way to stay competitive. Here’s how:

• Brush up on VantageScore vs. FICO differences

• Understand how GSE underwriting will weigh dual scores

• Know how to explain these changes to clients, partners, and referral sources

Need a refresher or want to level up? Mortgage Knowledge offers flexible, expert-led courses that go beyond basic licensing–designed to keep you at the forefront of the industry.

Final Thoughts: A Win for Borrowers (and MLOs)

VantageScore 4.0 isn’t just a technical change—it’s a mindset shift. It’s about expanding access, helping people qualify based on how they manage money—not just whether they’ve used a credit card.

For mortgage professionals, it’s an opportunity to say yes to more borrowers, improve outcomes for underserved clients, and grow your business while doing good.

This isn’t the end of FICO—but it’s the beginning of a more inclusive era.