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I am the author of this blog and also a top-producing Loan Officer and CEO of InstaMortgage Inc, the fastest-growing mortgage company in America. All the advice is based on my experience of helping thousands of homebuyers and homeowners. We are a mortgage company and will help you with all your mortgage needs. Unlike lead generation websites, we do not sell your information to multiple lenders or third-party companies.
For the last 30+ years, lenders have been using Fico scores. More mortgage lenders have the option to use Vantage credit scores starting in Q1 or 2024. You should understand the difference between Vantage and Fico credit scoring and what impacts them.
What Scoring Model will Mortgage Lenders be using?
They will use Vantage 4.0 and Fico 10T models. Both models show trended data, meaning not just a snapshot of the current time but how you have been paying your credit cards over a period of time.
Both of them also give scores for rent, utility, and insurance payments, which will help more borrowers qualify for a mortgage.
What Factors make up these Scores – Vantage vs Fico Scores?
You can get very different scores from both models because they give different weightage to different factors. For example, Vantage gives 40% weightage to your payment history, while Fico gives 35% weightage. On the other hand, Vantage gives only 20% weightage to what you owe on your revolving credit (credit cards), but Fico gives 30% weightage to that factor.
You might be in for a significant surprise when your credit is pulled if you’re not considering the right scoring model. Refer to the graphic above for a clearer insight into which model is used by whom and what you should be focusing on. Any questions? Feel free to write to me [email protected].
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