What is the "Credit Score Models and Reports Initiative"?
According to the Partner Playbook offered by Fannie Mae and Freddie Mac, the Credit Score Models and Reports Initiative is a "multiyear effort to update the current credit reporting requirements and replace the existing credit score model used for single-family loans sold to the GSEs."
There are three primary changes associated with the initiative:
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Change to Credit Report Requirements: Two credit reports per borrower (bi-merge) will now be permitted by the GSEs instead of three (tri-merge). These bi-merge reports will include a new credit score calculation. Participation in this change is optional. *
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Representative Score Change: The representative score change is a proposed update to how the score used for pricing and loan eligibility is calculated.
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Credit Score Models Update: Lenders will be required to deliver credit scores based on the FICO® Score 10 T and VantageScore® 4.0 credit score models, rather than the current credit score models alongside the FICO classic credit score model.
*Fannie Mae and Freddie Mac Partner Playbook (Updated July 2024)
Resources to Help You Prepare for These Changes
Fannie Mae and Freddie Mac both maintain regularly updated webpages where stakeholders may access current information about the changes. Resources include the Partner Playbook, which contains background information, a timeline, and frequently asked questions.
Additionally, Factual Data has worked alongside both FICO® and VantageScore® to offer the following resources, which provide more detailed information about the new credit score models.
FICO
Credit Scoring Model Resources
VantageScore
Credit Scoring Model Resources
What's Next?
Factual Data continues to engage with the FHFA Advisory group, the GSEs, industry partners, as well as our peers to ensure a smooth rollout of these new requirements. We will continue our ongoing dialogue with all participants as we await expected updates to the GSE playbooks.