📊Could the New Vantage Score be your key to home ownership? Here’s What First-Time Buyers Should Know
💡 Can the New VantageScore Help You Qualify for a Mortgage?
If you’re a first-time buyer trying to qualify for a mortgage, especially in Hampton Roads, this credit score update could directly impact your home loan approval. VantageScore 4.0 is a major shift in how your credit is measured—and it’s designed to give more people a fair shot at homeownership. This model takes a deeper look at how you manage credit over time and can now include things like rent and utility payments if they’re reported.
And now, it’s officially making its way into the mortgage world.
In July 2025, the Federal Housing Finance Agency (FHFA) approved VantageScore 4.0 for use in mortgage loans sold to Fannie Mae and Freddie Mac. That means it’s now eligible for the vast majority of mortgages in the U.S., alongside traditional FICO scoring.
Let’s break down what it means for you—and how you can take advantage of the changes.
🔑 Key Takeaways
-
VantageScore 4.0 is now approved for most U.S. mortgages via Fannie Mae and Freddie Mac as of July 2025.
-
Includes rent, utility, and telecom payments (if reported), expanding access to credit.
-
Requires only one month of credit history, making it ideal for first-time buyers and those with thin files.
-
Trended data and machine learning help lenders better predict repayment risk.
-
Potentially opens up $1 trillion in new mortgage loans, with over 5 million additional buyers gaining access.
-
Especially beneficial for Hampton Roads buyers—military families, renters, and underserved borrowers.
🔍 What is VantageScore?
VantageScore 4.0 is a credit scoring model developed by VantageScore, a company created by the three major credit bureaus—Equifax, Experian, and TransUnion.
It uses a 300–850 score range, just like FICO, but the way it evaluates your credit is more inclusive and predictive:
🔑 Key Features:
Inclusivity: Includes rent, utility, and telecom payments if reported—helping "thin file" borrowers.
Trended Data: Evaluates credit behavior over time, not just static balances.
Machine Learning: Improves accuracy in predicting repayment risks.
Medical Collections: Excluded to create a more consumer-friendly score.
Faster Updates: Responds to credit changes more quickly than traditional models.
It’s also estimated to capture 11.2% more mortgage defaults in high-risk borrowers compared to Classic FICO, making it attractive to lenders.
💳VantageScore vs. Fico: What Buyers Should Know
| Feature | VantageScore | FICO |
|---|---|---|
| Score Range | 300–850 | 300–850 |
| Minimum History Needed | 1 month of credit history | 6 months of credit history |
| Payment History Weight | Extremely influential | 35% of score |
| Credit Utilization | Highly influential | 30% of score |
| Medical Collections | Ignored (paid & unpaid) | Paid ignored in FICO 9, not in FICO 8 |
| Hard Inquiries | Deduped within 14 days | Deduped within 45 days |
| Used By | Some landlords, credit card issuers | 90% of top lenders |
🚨 Why It’s a Big Deal for Buyers in 2025
FHFA Approval: As of July 2025, lenders selling to Fannie Mae and Freddie Mac can now use VantageScore 4.0.
Expanded Access: Scores 33 million more people than FICO—10 million of them with scores above 620.
Financial Inclusion: Particularly helps renters, veterans, minorities, and rural buyers.
Competitive Edge: Could lead to lower credit check costs and more lender choices.
In fact, it’s estimated that this model could enable $1 trillion in new mortgage loans, potentially unlocking 5 million additional mortgages.
📚 Bonus Resource: Want to Dive Deeper?
Explore these trusted tools to learn more:
- VantageScore.com: Dive into the latest scoring model and how it affects lending.
- Consumer Financial Protection Bureau: Understand your rights, protections, and the scoring systems lenders use.
- Experian Boost: Learn how to potentially raise your credit score with reported positive payment history.
🧠 Pro Tip: Use This Time to Get Mortgage-Ready
Even if you’re not buying tomorrow, now is the time to optimize your credit profile so when VantageScore 4.0 becomes more widely adopted in 2025, you’re in the strongest position possible.
Use the next few months to:
-
Set up automatic payments on all accounts
-
Reduce credit card balances to under 30% of your limits
-
Contact your landlord and ask if they report rent payments—or consider signing up for a reporting service
-
Review your credit reports at AnnualCreditReport.com for any mistakes or outdated info
These moves won’t just help your VantageScore—they’ll also improve your traditional FICO score in the meantime.
❓ Frequently Asked Questions
Who uses VantageScore 4.0 now?
It’s now approved for use by Fannie Mae and Freddie Mac as of July 2025. Adoption by lenders is ramping up.
Will this affect my mortgage pre-approval?
Yes, especially if your FICO score didn’t include rent, utility, or other consistent payments.
Can I improve my VantageScore easily?
Yes. Focus on consistency, low balances, and alternative payment reporting.
How does it compare to FICO?
FICO uses traditional data, while VantageScore may offer a more comprehensive view of your financial habits.
Where can I check my VantageScore?
Many free platforms like Credit Karma now include VantageScore 4.0.
📍 Local Insight: Why This Matters in Hampton Roads
If you're buying a home in Hampton Roads, understanding the shift to VantageScore 4.0 isn’t just a “nice to know”—it could be the tipping point between homeownership and waiting another year. This scoring model is more flexible.
Here’s why it’s especially relevant in our market:
🪖 Military Families & First-Time Buyers: With our region’s strong military presence—Naval Station Norfolk, Joint Base Langley-Eustis, and more—many buyers use VA loans and have nontraditional credit histories. VantageScore 4.0 recognizes consistent rent, utility, and phone payments that older models may ignore.
🏘️ Renters Becoming Owners: As rental costs rise and incentives for homeownership grow, more locals are taking the leap. VantageScore 4.0 gives them credit (literally) for financial behaviors that were previously overlooked, helping them qualify faster and more confidently.
🧾 Alternative Income & Thin Credit Files: Freelancers, entrepreneurs, and gig workers thrive in coastal Virginia’s creative economy. Traditional credit scoring often penalizes these buyers, but VantageScore 4.0’s broader data inclusion and shorter lookback periods help surface their true creditworthiness.
📈 Real-Life Payment Patterns Matter: This model embraces financial complexity—late payments in the distant past matter less, and current positive behavior counts more. That’s especially powerful for buyers recovering from past financial hardships or rebuilding after divorce, medical bills, or job loss.
So if you've ever felt your score didn’t tell the whole story, this change means it finally might.
📲 Let’s Talk About Your Path to Homeownership
If you're renting know but thinking about buying, it's natural to feel unsure about where to begin. The good news? You don't have to go it alone. Whether your score is strong, thin, or improving, there are actionable steps you can take today to get closer to that first set of keys.
I specialize in helping first-time buyers and renters in Norfolk, Virginia Beach, Chesapeake, and throughout the 757 area understand how credit impacts financing options, down payment assistance, and the steps to buying a home from contract to closing.
If you're wondering where you stand or how to move forward, let's connect for a personalized consultation tailored to your goals and timeline.
👋 Let's Explore Your Options!
Still wondering how VantageScore 4.0 can help with your homebuying journey? Lets explore your options—and discuss custom plan for you.
_________________________
🏡 Think You Can’t Afford to Buy a Home? Think Again.
Many buyers think they need $20,000 saved up to buy—but that’s simply not true. Down payment assistance programs are available right here in our area, and some offer up to $40,000 in support for eligible buyers 💰
Whether you’re a first-time buyer or returning to the market, programs exist to help you bridge the gap to homeownership. Many opportunities are often first come, first served, so timing is everything ⏳.
✅ No 20% down required
✅ Programs for 1st time & repeat buyers
✅ Real help is just a click away
Comments