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 10T. This modernization represents a shift in the way mortgages will be underwritten and priced.

FICO 10T and VantageScore 4.0 both incorporate trended credit data—evaluating borrower behavior over a 24-month window rather than a point-in-time snapshot—a fundamental methodological departure from FICO Classic.

This paper, commissioned by FICO, evaluates the strength of the fit statistics for VantageScore 4.0 and FICO 10T, the distribution across credit score ranges, and the correlation between scores, and provides insights into how mortgage market participants should consider credit score modernization in modeling and investment decisions.

Key discussion points:

• Data: Six cross-sectional snapshots of credit bureau data at the individual trade level
• Distribution of scores: Mortgages by credit score for VantageScore 4.0 and FICO 10T
• Loan count and default rate matrix: Quantification of the degree of loan-level consistency between FICO 10T and VantageScore 4.0 for first-time homebuyers
• Predictive power: How well a 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 mortgage types

This report was commissioned by FICO.