If you’re planning to buy a home soon, big changes are coming to how your credit is scored — and they could work in your favor.
The Federal Housing Finance Agency (FHFA) has approved two new credit scoring models — VantageScore 4.0 and FICO 10T — for mortgages backed by Fannie Mae and Freddie Mac. Effective July 2025, lenders will be able to choose between these newer models or continue using the classic FICO version.
What’s Changing
The new credit score models go beyond traditional credit data. They consider alternative data such as:
- Rent and utility payment history
- Buy Now, Pay Later (BNPL) obligations
- Broader behavioral credit patterns over time
This shift means more borrowers — especially those with limited or “thin” credit files — could qualify for a mortgage. In fact, VantageScore estimates that up to five million additional borrowers could become mortgage-eligible under its updated system.
What It Means for You
If you’ve been responsibly paying rent or utilities but don’t have a long credit card history, these updates could boost your mortgage eligibility. However, if you have a lot of Buy Now, Pay Later debt or inconsistent reporting, the effect might vary depending on how lenders interpret your data.
Each lender may choose a different model for now, so your score (and possibly your loan terms) could differ between mortgage companies.
What You Can Do Now
- Check your credit reports with all three bureaus (Equifax, Experian, TransUnion). Make sure rent and utility payments are reported accurately.
- Ask lenders which scoring model they use — classic FICO or VantageScore 4.0 — before applying.
- Highlight your positive payment history if you have non-traditional credit.
- Avoid taking on new Buy Now, Pay Later debt or large credit lines right before applying.
- Shop around — differences in models could mean different results.
Bottom Line
The move toward new credit score models aims to make homeownership more accessible. By understanding how these changes affect your profile, you can position yourself for the best possible mortgage terms in 2025 and beyond.
Ready to Take the Next Step?
If you’re thinking about buying a home, now’s the perfect time to review your credit and understand how these upcoming changes could benefit you. Contact me today to get connected with trusted lenders, review your credit profile, and create a personalized plan to prepare for your home purchase.
