Fannie Mae and Freddie Mac's new policy enables lenders to utilize VantageScore credit ratings, considering timely rent payments as part of creditworthiness assessments. This change benefits first-time homebuyers and those with limited credit history. VantageScore differs from FICO, as it can generate profiles with just one month of payment history. Federal Housing Finance Agency Director Bill Pulte emphasized that this policy expands access to credit for many Americans and could stimulate the housing market by turning renters into potential homeowners.
Fannie Mae and Freddie Mac now allow mortgage lenders to use VantageScore credit ratings, which considers timely rent payments, potentially benefiting first-time homebuyers.
The new policy aims to improve credit access for countless Americans, especially those in rural areas, by factoring in their rent payment histories into credit evaluations.
Unlike FICO, VantageScore can use just one month of credit history to generate a profile, helping people not currently in traditional credit systems.
This policy aims to increase the pool of eligible homebuyers and enhance the overall housing market by leveraging rental histories to support mortgage applications.
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