Credit Scoring Is Changing: 3 Things Homebuyers Should Know
Credit scores help decide whether you can buy a home and what mortgage rate you will be offered. They can also determine how much house you can afford, and whether a lender will approve your loan.
That is why a big change coming from Fannie Mae and Freddie Mac matters. These are the two government-backed companies that help make mortgages possible, and they are shifting which credit scores lenders can use.
Here is what you need to know.
1. Big Changes Are Coming
For years, Fannie Mae and Freddie Mac have required lenders to use classic FICO scores. But in 2025, the new score requirements officially take effect. Lenders will be able to use VantageScore 4.0, as well as the updated FICO 10T score.
Why does that matter? Because different scoring models calculate your credit differently. Your score under one model might not be the same as under another. A score that qualified you under the old model might look different under the new one, or vice versa.
That means it is more important than ever to understand how your credit is scored and what you can do to improve it.
2. New Scores May Help More Buyers Qualify
One big benefit of the new scoring models is that they use more information. For example, VantageScore 4.0 can include rental payment history, which can help buyers who have not yet built a traditional credit history through loans or credit cards.
That is good news if you have been renting for years and paying on time, but have not yet built a long credit file. Your on-time rent payments could now help show lenders that you are a responsible borrower.
The new models also consider trended credit data, which looks at how your balances change over time, not just a snapshot. That can give a more complete picture of your financial habits.
3. What You Can Do Now
Whether you are buying soon or just starting to plan, here are a few steps you can take:
- Check your credit reports. You can get a free report from each of the three major credit bureaus at AnnualCreditReport.com. Make sure there are no errors, and dispute anything that looks wrong.
- Pay your bills on time. Payment history is still one of the biggest factors in your score, no matter which model is used.
- Do not open too many new accounts at once. Each new credit inquiry can temporarily lower your score, so be strategic if you are planning to apply for a mortgage soon.
- Talk to a lender early. A trusted lender can help you understand which score model they use and what you can do to be in the strongest position when you are ready to buy.
Bottom Line
Credit scoring is changing, and it could affect your ability to buy a home. If you are thinking about purchasing, now is a great time to check your credit, understand the new scoring models, and talk to a lender about your options.
Reach out today and I can connect you with a trusted lender and help you take the next step toward homeownership with confidence.