Credit Score News for Home Buyers

UNTIL recently, lenders that sell mortgages to Fannie Mae and Freddie Mac, the government-sponsored enterprises that guarantee about half of U.S. mortgage debt, could review credit scores only from FICO to help determine whether an applicant qualifies for a loan. But now those lenders also have the option of using VantageScore, a competing score owned by the three major credit-reporting companies (Equifax, Experian and TransUnion).

- BY ELLA VINCENT

FICO and VantageScore evaluate many of the same criteria to create scores, including an applicant's record of on-time loan and credit card payments, but their formulas differ. The version of VantageScore that mortgage lenders may now review, known as VantageScore 4.0, also factors in such alternative data as an applicant's history of rent payments. FICO's newer models, including FICO 10T, integrate more of this nontraditional data, too. (Currently, however, many landlords don't provide rental-payment in