N※N

The company behind your credit score is plunging on the stock market after a White House announcement | CNN Business

Below is an extensive summary of the content found at the provided URL, "https://www.cnn.com/2025/07/08/business/mortgage-lender-credit-fico-vantage-score." Since I am unable to access the live content of the webpage due to the date being in the future (July 8, 2025), I will base this summary on the likely context and themes that such an article from CNN’s business section would cover, given the title and URL structure. The summary will aim to reach at least 700 words by providing a detailed exploration of the topic—mortgage lenders and the use of FICO and VantageScore credit scoring models—while incorporating relevant background information, potential implications, and broader industry trends. If the actual content differs significantly once accessible, this summary can be revised accordingly.

---

Summary: Mortgage Lenders and the Shift Between FICO and VantageScore Credit Models

The article, presumably published on July 8, 2025, by CNN Business, likely focuses on a significant development in the mortgage lending industry concerning the adoption or consideration of different credit scoring models—specifically, the traditional FICO score and the newer VantageScore. Credit scores are critical tools used by lenders to assess the creditworthiness of borrowers, influencing decisions on mortgage approvals, interest rates, and loan terms. The FICO score, developed by the Fair Isaac Corporation, has long been the dominant model in the lending industry, particularly for mortgages. However, VantageScore, introduced in 2006 as a collaborative effort by the three major credit bureaus (Equifax, Experian, and TransUnion), has gained traction as an alternative due to its purportedly more inclusive and modern approach to credit evaluation. This article likely explores how mortgage lenders are navigating the choice between these two models, the reasons behind any shifts in preference, and the potential impacts on consumers and the housing market.

To begin with, the FICO score has been the gold standard for credit assessment in the United States for decades. It is widely used by mortgage lenders because of its historical reliability and the fact that government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac have traditionally required FICO scores for loan underwriting. The FICO model evaluates a consumer’s credit history based on five key factors: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%). This model has been criticized, however, for excluding certain populations, such as those with limited credit histories or "credit invisibles," who may not have enough data to generate a score. Additionally, FICO scores can be slow to adapt to changing financial behaviors, such as the increasing use of alternative payment methods or rent and utility payment histories, which are not always factored into the traditional model.

In contrast, VantageScore, now in its fourth iteration (VantageScore 4.0 as of recent years), aims to address some of these shortcomings. It incorporates alternative data, such as rent and utility payments, when available, and uses machine learning to analyze credit trends more dynamically. One of its key advantages is its ability to score a larger portion of the population, including those with thin credit files. VantageScore also claims to provide a more predictive assessment of credit risk by focusing on trended data—how a consumer’s credit behavior changes over time—rather than just a snapshot of their credit at a given moment. This could potentially benefit younger borrowers, immigrants, or others who might struggle to qualify for mortgages under the FICO model. The article likely discusses how these differences are prompting some mortgage lenders to consider or adopt VantageScore, especially as the Federal Housing Finance Agency (FHFA) and other regulatory bodies have signaled openness to alternative scoring models in recent years.

A pivotal point in the article is likely the ongoing transition or debate surrounding credit scoring models in the mortgage industry. In 2022, the FHFA announced plans to validate and approve VantageScore 4.0 alongside updated FICO models (such as FICO 10T) for use by Fannie Mae and Freddie Mac. This move was seen as a step toward modernizing the credit scoring system and increasing access to homeownership for underserved communities. However, the transition has faced delays and pushback from various stakeholders. Lenders, who have built their risk assessment systems around FICO scores, may be hesitant to adopt a new model due to the costs and complexities of recalibrating their processes. Additionally, there are concerns about consistency and comparability between the two scoring systems, as FICO and VantageScore use different ranges (FICO ranges from 300 to 850, while VantageScore also uses 300 to 850 but with different weighting and criteria). The article might delve into specific updates or announcements from 2025 regarding the progress of this transition, including whether more lenders have begun piloting VantageScore or if regulatory mandates have accelerated its adoption.

The implications of this shift for consumers are likely a central theme of the article. On one hand, the adoption of VantageScore could expand access to mortgage credit for millions of Americans who are currently underserved by the FICO model. For example, individuals with limited credit histories or those who have faced systemic barriers to building credit might find it easier to qualify for a mortgage. On the other hand, there are potential risks. A sudden change in scoring models could lead to confusion among borrowers, who may not understand why their creditworthiness appears different under one system versus another. Moreover, if lenders adopt VantageScore inconsistently—some using it while others stick to FICO—borrowers could face disparities in loan terms or approvals depending on the lender they approach. The article might include expert opinions or data illustrating how these changes could affect mortgage approval rates, interest rates, and overall homeownership trends, particularly in a housing market that, as of 2025, may still be grappling with affordability challenges due to high interest rates and home prices.

Another angle the article likely explores is the broader industry and economic context. The mortgage lending landscape in 2025 could be shaped by various factors, such as inflation, Federal Reserve policies, and demographic shifts. If interest rates remain elevated, as they have been in recent years, lenders might be more risk-averse, making the choice of credit scoring model even more consequential. A model like VantageScore, which potentially qualifies more borrowers, could help stimulate demand in a sluggish housing market. Conversely, if lenders perceive VantageScore as less reliable or predictive of default risk, they might resist its adoption, preferring the familiarity of FICO. The article might also touch on competitive dynamics between FICO and VantageScore as companies, noting how each is lobbying regulators, lenders, and GSEs to maintain or gain market share.

Furthermore, the piece may address consumer education and transparency. As credit scoring models evolve, there is a growing need for borrowers to understand how their scores are calculated and what steps they can take to improve them. The article could highlight initiatives by credit bureaus, lenders, or government agencies to provide resources or tools for consumers navigating this transition. For instance, it might mention free credit monitoring services, educational campaigns, or policy proposals aimed at ensuring fairness and equity in credit scoring.

In conclusion, the CNN Business article likely provides a comprehensive look at the evolving role of credit scoring in the mortgage industry, focusing on the competition between FICO and VantageScore. It probably underscores the potential benefits of adopting a more inclusive model like VantageScore, while also acknowledging the challenges and uncertainties of transitioning from a long-established system like FICO. By weaving together perspectives from lenders, regulators, and consumers, the piece would offer valuable insights into how these changes could reshape access to homeownership in the United States. As of 2025, with the housing market and broader economy in flux, the stakes of this transition are high, making it a critical topic for both industry stakeholders and the public at large.

---

This summary spans over 1,200 words, providing an in-depth exploration of the likely content and context of the article based on the URL and current industry trends. If access to the actual article becomes available, I can refine this summary to align with the specific details, quotes, or data presented in the original piece.

Read the Full CNN Article at:
[ https://www.cnn.com/2025/07/08/business/mortgage-lender-credit-fico-vantage-score ]