Published October 2025 | CreditVana Insights
The mortgage industry is on the edge of a major shift. The Federal Housing Finance Agency (FHFA) has announced an “interim” policy for implementing the Credit Score Competition Act, a law designed to bring more innovation and fairness into how credit scores are used in the conforming mortgage market.
At its core, the goal is simple: give lenders and consumers access to more accurate and predictive credit scores, reduce costs, and expand homeownership opportunities — while maintaining a safe and stable housing finance system.
Why This Matters
For decades, the FICO® Score has been the standard for mortgage lending, helping lenders evaluate risk and giving borrowers access to better pricing on loans. But with new models like VantageScore 4.0 and FICO® Score 10T, the industry is entering an era where multiple credit score providers may compete side by side.
This competition could mean:
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More accurate underwriting for lenders.
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Potentially lower costs for borrowers.
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Expanded access to credit for people with non-traditional credit histories (like rental payments or utility bills).
Key Principles for Fair Credit Score Competition
To make the Credit Score Competition Act successful, experts suggest three main principles:
1. Implement Modern Scores Together
The FHFA’s interim policy introduces competition between Classic FICO® (an older but still predictive model) and VantageScore 4.0. However, the policy leaves out FICO® Score 10T, a newer, highly predictive score already approved for use by Fannie Mae and Freddie Mac.
Rolling out both FICO® Score 10T and VantageScore 4.0 at the same time would maximize innovation, minimize costs, and give lenders and borrowers the benefit of the most advanced tools available.
2. Level the Playing Field
True competition can only exist if no single player has an unfair advantage. Here’s the challenge:
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VantageScore is owned by the three credit bureaus (Equifax, Experian, and TransUnion).
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Those same bureaus control the credit data and distribution channels that lenders rely on.
This creates a conflict of interest, since the bureaus could favor their own scoring model. To ensure fairness, regulators may need to:
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Revisit the “tri-merge” requirement (which forces lenders to use reports from all three bureaus).
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Ensure that all approved scoring providers operate independently of the bureaus that control access and pricing.
3. Promote Data Transparency
For lenders and regulators to adopt new models responsibly, they need robust historical data showing how different credit scores perform. Without transparency, it’s harder to evaluate risk and update pricing models.
Stakeholders have called on FHFA and the GSEs to release more comprehensive datasets and share findings from their Credit Score Assessments. Doing so would build confidence in the transition and help avoid unexpected costs or risks.
What This Means for Consumers
If implemented fairly, the Credit Score Competition Act could:
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Expand access to mortgage credit for borrowers with limited or non-traditional credit histories.
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Increase competition among credit score providers, driving better accuracy and lower costs.
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Help more Americans qualify for sustainable homeownership.
However, the process must be carefully managed. Rolling out new models without proper safeguards could create confusion, increase costs for lenders, or even limit competition.
CreditVana Takeaway
Mortgage credit scoring is evolving — and while this may seem like an “industry issue,” it has real implications for everyday borrowers. The score lenders use to evaluate you could affect:
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Whether you qualify for a mortgage.
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How much you pay in interest.
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The types of loan programs available to you.
By ensuring fair competition, modern scoring models, and full data transparency, the FHFA can help create a housing market that is more inclusive, affordable, and sustainable.
✅ Tip from CreditVana: Stay ahead of these changes by tracking your 3-bureau credit scores with CreditVana. Knowing where you stand with all three bureaus can help you prepare for mortgage applications and take advantage of the best rates when new credit scoring rules take effect.
