FICO

The average VantageScore last year was higher than it has been since 2007 due to improved hiring and despite stagnant wages that aren't keeping pace with rising debt levels.

Consumer credit scores are improving, but many qualified borrowers are still hesitant about buying a house. New tools are helping lenders better assess risk and show consumers with lower credit scores they can qualify for mortgages.

The gap between the average credit score for homebuyers and other consumers has widened to its highest point in 12 years, and lenders don't know what, if anything, to do about it.

The two government-sponsored enterprises have relied on the “classic” FICO credit scoring model for the past 12 years. But the Federal Housing Finance Agency is weighing whether the GSEs should upgrade to more recent scoring alternatives.

Borrowers will be able to take out a substantially bigger home loan backed by Fannie Mae and Freddie Mac next year, thanks to a 6.8% increase in home prices nationwide.

Competition in other areas of consumer lending has driven both VantageScore and FICO to build credit scoring models that are more accurate and more consumer-friendly. Permitting that competition in the mortgage market can increase certainty for lenders and transparency for investors.

Efforts to persuade regulators to allow Fannie Mae and Freddie Mac to use alternative credit scores would stifle competition between the credit bureaus and FICO and do little to expand access to credit, according to industry analyst Chris Whalen.