New Credit Score Model Could Help 5 Million More Americans Qualify for a Mortgage | Big 2025 Lending Shift

Sarah Breck
Jul 22
3 min read

Updated: Jul 27

By Sarah Breck — Boise real estate agent helping buyers, sellers, and relocators make confident moves with strategy, savvy, and a human touch.

A Big Change in How Mortgages Are Approved

For decades, mortgage lenders had a one-track mind when it came to credit: FICO, FICO, FICO. If your FICO score didn’t check all the boxes, you were often left out of the conversation—even if you paid your rent and bills on time.

But now, that’s all changing.

On July 8, Federal Housing Finance Agency Director Bill Pulte announced a major shift: Mortgage giants Fannie Mae and Freddie Mac will begin using a second credit score model—VantageScore 4.0—in addition to FICO. And that could help millions more Americans finally qualify for a home loan.

“Credit history will no longer just include credit cards and loans,” Pulte wrote on X. “This is HUGE.”

What Is the New Credit Score Model?

The new credit score model, known as VantageScore 4.0, expands the criteria used to evaluate mortgage applicants. While the traditional FICO model mostly looks at credit cards, car loans, and other major debts, VantageScore includes additional data like:

Rent payments
Utility bills
Phone bills

This broader view gives lenders a better sense of your real-world financial responsibility—especially if you’re someone who hasn’t had access to traditional credit but still pays bills on time.

Tony Hutchinson, head of public affairs at VantageScore, explains:

“This will open the door for a large number of people who have been invisible. It becomes empowering for the consumer.”

Who Benefits from This Change?

According to VantageScore, the new model can score 33 million more Americans than FICO. Of that group, 13 million have a VantageScore of 620 or higher—the minimum needed to qualify for a Fannie or Freddie loan. And an estimated 5 million of those could afford to purchase a home today.

So if you've been responsible with money but haven’t had the “right kind” of credit to show it, this update could finally help you get in the game.

Will This Save Buyers Money?

Kind of—but don’t expect a windfall.

Lenders have long complained about rising credit score costs, and the addition of a new model could create price competition. But as FICO CEO Will Lansing points out, their fees make up only about 0.2% of the average $6,000 closing costs.

So yes, this could chip away at expenses—but it won’t be the make-or-break factor in affordability.

When Will This Take Effect?

While the news is official, Fannie Mae and Freddie Mac still need time to update their systems to accommodate dual scoring models. There's no official rollout date yet, but if you're planning to buy in late 2025 or 2026, this could absolutely impact your options.

What This Means for Boise Buyers

Here in Boise, where many renters are trying to break into the homeownership market, this change could open up real opportunity. If your rental history or utility payments show you’re financially responsible, you may now have a credit score that finally reflects that.

If you’ve been denied before, or told to “build more traditional credit,” now is the time to re-evaluate your mortgage options.

Ready to Explore Your Buying Power?

Let’s see where you stand under this new scoring model. I help first-time buyers in Boise understand their options and build a path toward homeownership—without the overwhelm.

📥 Get my free First-Time Buyer Bootcamp guide here

📅 Book a free buyer consultation with me

About Sarah – With over 16 years of entrepreneurial experience, Sarah blends grace, grit, and expert guidance to create a real estate experience that’s as strategic as it is personal. Passionate about empowering her clients—especially first-time buyers and women—she’s dedicated to turning complex market moves into confident, seamless transitions in Boise and the Treasure Valley.