Home Loans: New Credit Scoring Models Expand Access
Update: 2025-12-12
Description
Fannie Mae and Freddie Mac are revolutionizing home loan qualifications by moving beyond traditional FICO scores. Theyre now considering factors like reserves, debt levels, property characteristics, and loan purpose. This shift, driven by new credit models like VantageScore four point zero and FICO ten T, incorporates trended data and alternative data. This change aims to provide a more nuanced understanding of a borrowers financial health, potentially expanding access to credit for groups like first-time homebuyers, young adults, and renters. However, maintaining a good credit score remains crucial for securing better loan terms.
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