What Trump Admin’s Credit Score Shake Up Means for Buying a Home
Summary
The Trump administration announced that the Federal Housing Administration (FHA) and mortgage companies Fannie Mae and Freddie Mac will start using new credit score models called VantageScore 4.0 and FICO 10T. These updated models include rent and utility payment history to better judge creditworthiness, making it easier for more people to qualify for home loans.Key Facts
- The FHA, Fannie Mae, and Freddie Mac will adopt new credit scoring models for mortgages within months.
- The new models are VantageScore 4.0 and FICO 10T, which use additional data like rent and utility payments.
- These models use modern methods like machine learning to predict creditworthiness more accurately.
- The change aims to help people with good payment histories on rent and utilities qualify for home loans.
- Fannie Mae and Freddie Mac will start with a pilot program using these new scores before full rollout.
- The update is intended to lower housing costs and increase homeownership, especially for young people.
- HUD Secretary Scott Turner said this move promotes competition and innovation in the mortgage market.
- Including rental history helps assess credit more fairly, as many people had only been judged by traditional credit scores.
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