Credit score competition reduces mortgage market risk

The opinions published in National Mortgage News ("Credit Scores Are Not the Issue" by Christopher Whalen; "Pulte's hands credit bureaus an unfair edge" by Chi Chi Wu), are incorrect and misleading. Contrary to the views expressed in those pieces, competition and modernization in the mortgage credit scoring system are significantly enhanced by VantageScore being allowed to compete by the FHFA.  There simply is no valid justification for keeping the now-abolished FICO monopoly for Fannie and Freddie mortgage credit scores. 

The use of VantageScore 4.0 reduces risk in the mortgage market. Multiple independent research studies published over the past year by Bloomberg Intelligence, KBRA, Bank of America, JP Morgan Chase and others all reach the same conclusion: VantageScore 4.0 is more predictive than FICO Classic, and up to 15% more predictive in economic stress scenarios like the COVID pandemic. 

On a historical basis, FICO Classic was the only credit score in use during the Global Financial Crisis. Yuliya Demyanyk of the Federal Reserve Bank of St. Louis reported that "FICO scores have not acted as a predictor" of default in the financial crisis: default rates rose for every FICO category, and in fact the increase in default rates was larger in absolute terms for higher-score borrowers than for lower-score ones. 

VantageScore 4.0 is not just a competitive option — it is an incredible upgrade.

VantageScore has been and always will be pro-competition. This can be evidenced by our transparency in providing detailed overviews of our models, open access to score related data and the publication of 10 years of historical credit score performance data from 2013 to 2023. 

Contrast this with our competitor, which has not released any data about its 10T credit score model for open market  evaluation, and continues to resist and restrict open competition. A letter to FHFA from the Structured Finance Association states, "We understand that certain legacy contracts may impair or restrict the ability of market participants to undertake these comparisons and publish their findings." 

Competition breeds better, more predictive credit scores. The bottom line is that competition in mortgage credit scoring is not optional — it's the law. The 2018 Credit Score Competition Act mandates it. Congress supports it, including 23 members of the House Financial Services Committee who sent a letter on July 18, 2025 encouraging immediate implementation. The FHFA has approved it and ordered the GSEs to implement VantageScore 4.0 effective immediately. And most importantly, mortgage lenders, taxpayers and consumers will benefit from more predictive and inclusive models.

The mortgage market's health depends on innovation and openness and competition. Those who fear competition will fall further behind. The rest of us are ready to move forward.