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New Mortgage score models accepted by Fannie Mae and Freddie Mac

Revelate
Moderator Emeritus

Re: New Mortgage score models accepted by Fannie Mae and Freddie Mac


@Lou-natic wrote:

@Curious_George2 wrote:

@Revelate wrote:

My gold plated EX file for giggles (zero inquiry, *almost* AZEO, just installment utilization is the only "problem" with the file these days).

 

EX FICO 2: 821

EX FICO 10T: 846

 

I wonder what's missing for 4 more points Smiley Very Happy

 

ETA: well crap I have 2 revolvers with balances actually, Zync had it's AF come due hahahahaha.


It cares what your utilization has been for the past 24 months, right? 

Do we know if that's the only trend it cares about? Or will one's trends in, say, credit limits or the number of baddies, open accounts or closed accounts also affect 10T scores?


"The FICO Score 10 Suite is the newest FICO credit scoring model, consisting of two scores: FICO 10 and FICO 10T. The FICO 10T credit score includes trended data, which looks at individual consumers' payment and debt history for the previous 24-plus months to help calculate their credit scores." So it appears they would be looking at utilization for every month going back 2 years instead of just the current month like they do with the older scores. So no more cheating doing AZEO the month before you apply for your mortgage to "boost" your scores to make things look good on paper.

Yeah, when they first announced it I thought it was going to be a major step forward for credit scoring in general and could stop worrying about the stupid reindeer games when it came to revolving balances reporting.  I personally have been PIFing for a lot longer than 24 months so I should be pretty on that front... I have yet to pull a recent report from the bureaus though to see if all accounts are providing trended data, so I wouldn't be surprised if there was a secondary calculation too on current balances.  Hard to say.

 

I can't really tease anything out about FICO 10/10T from either report, both on my dirty birdy EQ (unpaid, not updating CO for $182 from over 2 years ago) and my bulletproof EX those two are each my highest 2 scores, but whereas EX has 10T 9 points higher, EQ has 10 Classic 5 points higher.

 

The reason codes are identical on the EQ side, FICO 10T still cares about installment loan utilization haha.  Either that or maybe longer history are the only paths to the pointless perfect for me apparently.  

 

Some things don't change. Cat Tongue




        
Message 21 of 31
LADave
Established Contributor

Re: New Mortgage score models accepted by Fannie Mae and Freddie Mac


@Revelate wrote:

Final question do we really *know* that VS 4 is discounting closed accounts?  We've never been sure of that even on VS 3 AFAIK because Credit Karma and others are not reference AT ALL for the actual model and I don't think any of the CRAs have disclosed publicly? 


The only source I found that definitively says yes to this is a 2014 article from DoctorOfCredit.com (https://www.doctorofcredit.com/how-average-age-of-accounts-is-calculated-affects-your-credit-score/). Back then 3.0 was the latest version of VantageScore. I'm not sure what DoC's source was, and VS themselves don't appear to be saying. My VS 3.0 scores did drop when I closed my oldest account, a Credit One card that had an annual fee with no benefits, but a new card also reported for me at the same time.

 

I thought I had read that VS4 was not counting closed accounts towards AAoA, but I might have been wrong about that.

 

Even with the lack of confirmed data, I believe it's still worth it to act as if closed accounts do not help VantageScores.

Message 22 of 31
Lou-natic
Established Contributor

Re: New Mortgage score models accepted by Fannie Mae and Freddie Mac

vs4drunk.JPG

Just something I got a kick out of the other day about my VS4 score. The descriptions make more sense but I still found it funny.

 




3/4/23



Message 23 of 31
Revelate
Moderator Emeritus

Re: New Mortgage score models accepted by Fannie Mae and Freddie Mac


@LADave wrote:

@Revelate wrote:

Final question do we really *know* that VS 4 is discounting closed accounts?  We've never been sure of that even on VS 3 AFAIK because Credit Karma and others are not reference AT ALL for the actual model and I don't think any of the CRAs have disclosed publicly? 


The only source I found that definitively says yes to this is a 2014 article from DoctorOfCredit.com (https://www.doctorofcredit.com/how-average-age-of-accounts-is-calculated-affects-your-credit-score/). Back then 3.0 was the latest version of VantageScore. I'm not sure what DoC's source was, and VS themselves don't appear to be saying. My VS 3.0 scores did drop when I closed my oldest account, a Credit One card that had an annual fee with no benefits, but a new card also reported for me at the same time.

 

I thought I had read that VS4 was not counting closed accounts towards AAoA, but I might have been wrong about that.

 

Even with the lack of confirmed data, I believe it's still worth it to act as if closed accounts do not help VantageScores.


I guess it doesn't really matter one way or the other: the credit file is the credit file, VS gonna VS just like FICO gonna FICO.

 

Re: DoC, sometimes their sources are this forum, so I don't really count an uncredited article there as reference FWIW. 

 

Pretty sure this upcoming mortgage will be sorted on the traditional tri-merge, by the time I look at anything else VS4 will probably be available somewhere easily.  Don't know why CK hasn't switched yet actually.




        
Message 24 of 31
Catbird_Seat
Contributor

Re: New Mortgage score models accepted by Fannie Mae and Freddie Mac


@Zoostation1 wrote:

@LADave wrote:

Over the next few years, this could easily upend almost everything we think we know about predicting credit approval based on scores.

...

 

Other than Synchrony giving free VantageScore 4.0 scores to their customers, I'm not aware of any institution that gives free FICO 10T or Vantage Score 4.0s — and if that doesn't change, you'll need to pay for them. Assuming F-10T and VS4 become the default, any earlier version of your FICO scores will be the new "FAKO" scores, along with your VantageScore 3.0s. (I would be shocked if MyFICO isn't already considering providing VantageScore 4.0s along with FICO scores in the future, just to stay competitive.)

...

 

And since VantageScore 4.0 does not let closed accounts contribute towards AAoA for 10 years like FICO (I believe 10T still counts them), closing accounts could make a bigger difference in the future than it does today, particularly for older accounts.

 

Because trending is likely to become significant in the near future, it's a good idea to look at how our present behavior can affect our future approval.


I quoted the portions of what you wrote that really stand out to me...

 

First off.  Is there even anyone besides Synchrony who provides a VS4.0 score at all? I've been under the impression that it's virtually impossible for consumers to purchase a VS4.0 score. 

 

Secondly, VS4.0 not allowing closed accounts to be considered in aging the way FICO scores do for 10 years is a HUGE negative IMO.  If anything I think it will benefit the bottom of the barrel sub prime lenders like Bank of Missouri and Credit One who have ridiculous fees on starter and rebuilding cards.  This is going to make people think twice before closing out garbage accounts that no longer serve a purpose for them and just leech money.  Currently there's no reason to keep an Applied Bank or Credit One account that's racking you for a $75 AF and has no benefits.  If VS4.0 dings you on AAoA for closing it that gives people incentive to keep trash accounts open that should be closed once they've outgrown them.  Granted people should be thinking finances over FICO (or Vantage in this case) but removign them from AAoA  still encourages behaviors that are not beneficial and I don't think it's right to penalize people for making good financial decisions.


Long time lurker, I finally decided to comment after seeing this post.

I'm aware that Fortiva is not looked upon well on the site but they do offer a free monthly Vantage 4.0 score.  

Message 25 of 31
Anonymalous
Valued Contributor

Re: New Mortgage score models accepted by Fannie Mae and Freddie Mac


@Catbird_Seat wrote:


Long time lurker, I finally decided to comment after seeing this post.

I'm aware that Fortiva is not looked upon well on the site but they do offer a free monthly Vantage 4.0 score.  


That could be useful, but their credit card page says they provide Vantage Score 3.0, not 4.0:

https://www.credit-land.com/details/fortiva-credit-card.php

Message 26 of 31
Catbird_Seat
Contributor

Re: New Mortgage score models accepted by Fannie Mae and Freddie Mac


@Anonymalous wrote:

@Catbird_Seat wrote:


Long time lurker, I finally decided to comment after seeing this post.

I'm aware that Fortiva is not looked upon well on the site but they do offer a free monthly Vantage 4.0 score.  


That could be useful, but their credit card page says they provide Vantage Score 3.0, not 4.0:

https://www.credit-land.com/details/fortiva-credit-card.php


I logged in today & it shows Vantage 4.0.

I'm too new to post a screenshot.

Scroll to the bottom of this page & it states Vantage 4.0.

https://www.myfortiva.com/unsecured-credit-card/?gclid=Cj0KCQiA37KbBhDgARIsAIzce16uYr6DjI94HrQ2WJiPr...

Message 27 of 31
Anonymalous
Valued Contributor

Re: New Mortgage score models accepted by Fannie Mae and Freddie Mac


@Catbird_Seat wrote:

@Anonymalous wrote:

@Catbird_Seat wrote:


Long time lurker, I finally decided to comment after seeing this post.

I'm aware that Fortiva is not looked upon well on the site but they do offer a free monthly Vantage 4.0 score.  


That could be useful, but their credit card page says they provide Vantage Score 3.0, not 4.0:

https://www.credit-land.com/details/fortiva-credit-card.php


I logged in today & it shows Vantage 4.0.

I'm too new to post a screenshot.


Must be a new change, then. It's good there's at least one source.

Message 28 of 31
ShanetheMortgageMan
Super Contributor

Re: New Mortgage score models accepted by Fannie Mae and Freddie Mac


@Curious_George2 wrote:

It's great to hear they are finally modernizing this! I wonder how quickly this change will propagate through the lending world?

 


From talking with some higher ups (VP's of Mortgage Lending, Secondary Markets) it's not expected to be implemented until 2024.

Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 29 of 31
ShanetheMortgageMan
Super Contributor

Re: New Mortgage score models accepted by Fannie Mae and Freddie Mac

Some updated information regarding the credit scoring system changes with mortgages was posted earlier this month at https://www.fhfa.gov/PolicyProgramsResearch/Policy/Pages/Credit-Scores-2023.aspx (contains numerous links/resources).   Was on a call today and it was reiterated these changes will happen in 2024, but a little later in the year than initially expected (currently estimated to be 2nd quarter).

Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 30 of 31
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