In 2020, the Federal Housing Finance Agency (FHFA) started a process to modernize the credit score models used for loan delivery to Freddie Mac and Fannie Mae. Since the late 1990s, FICO Classic has been relied upon by Freddie and Fannie. As of May 2026, FHFA had approved two additional credit scores that lenders can use for mortgages delivered to the agencies: VantageScore 4.0 and FICO Score 10T (FICO 10T). This modernization represents a shift in the way mortgages will be underwritten and priced.

This paper, commissioned by FICO, evaluates the strength of the fit statistics for FICO 10T and VantageScore 4.0, the distribution across credit score bins, and the degree of loan-level consistency between the scores. This research helps market participants independently evaluate each credit score for underwriting and pricing mortgages.

Key discussion points:

• Data: Six cross-sectional snapshots of credit bureau data at the individual trade level
• Segmentation: Data is evaluated for all mortgages and separately for Freddie/Fannie and FHA mortgages
• Distribution by credit score: Distribution and default rate by credit score for FICO 10T and VantageScore4.0 bins
• Measures of predictive power: Three measures of predictive power are evaluated to analyze how well each credit score differentiates borrowers that are more likely to default from borrowers that are less likely to default
• Summary of analysis: FICO 10T shows the highest measure of predictive power across all model fit statistics and mortgages