VantageScore, a national credit-scoring company, recently announced the release of a comprehensive, loan level, VantageScore 4.0 historical data set to mortgage industry participants.
The Federal Housing Finance Agency (FHFA), alongside Fannie Mae and Freddie Mac, are releasing the data to support the FHFA mandated implementation of VantageScore 4.0 credit scores for mortgages.
The data set released represents a portion of the government-sponsored enterprises’ (GSE) loan portfolios from 2013 to 2023. Loan level data for VantageScore 4.0 includes 25 million records for Fannie Mae and 20 million records for Freddie Mac. Within both data sets, each loan has a VantageScore 4.0 credit score.
Additionally, the mortgage-backed securities (MBS) and credit risk transfer (CRT) information amounts to another 38 million records for Fannie Mae and 33 million records for Freddie Mac. By providing these extensive data sets and aiding the swift implementation of VantageScore 4.0 for GSE-funded mortgages, VantageScore estimates the number of qualifying eligible mortgage applicants will increase by over 2.5 million, resulting in an incremental $1 trillion in potential new mortgages.
“VantageScore applauds the FHFA and the GSEs in their commitment to implement VantageScore 4.0 in order to provide the mortgage industry with the most innovative, predictive and inclusive credit scores,” Anthony Hutchinson, senior vice president, industry and government relations, VantageScore, said in the release. “This is an important and necessary step to modernize the outdated and exclusionary credit scores that lenders in the conventional-conforming mortgage market have been forced to use.”
In 2022, the FHFA mandated the use of VantageScore 4.0 for lenders who sell loans to Fannie Mae or Freddie Mac pursuant to the 2018 Credit Score Competition Act. This action by the FHFA addresses the homeownership gap in the U.S. while simultaneously improving predictive performance for lenders.
Outdated models in housing finance often exclude millions of creditworthy, underserved borrowers. VantageScore 4.0 scores an estimated incremental 33 million more people than traditional models, making it considerably more inclusive. For this reason, the FHFA’s efforts to modernize mortgage risk assessment and encourage credit-scoring competition in the mortgage industry have been met with broad, bipartisan Congressional support.