By Femme Capital Partners
For decades, the road to mortgage approval ran through one powerful gatekeeper: your FICO score. That three-digit number has shaped whether you qualify for a home loan, what interest rate you get, and even how much you’ll pay over the life of your loan.
But now, the credit landscape is shifting and millions of Americans may finally get a fair shot at homeownership.
The Big News: Fannie Mae & Freddie Mac Will Begin Accepting a Second Credit Score
On July 8, Bill Pulte, Director of the Federal Housing Finance Agency (FHFA), announced a major update that will reshape the mortgage industry:
Fannie Mae and Freddie Mac will soon accept an alternative credit score —VantageScore 4.0 in addition to FICO.
“Credit history will no longer just include credit cards and loans,” Pulte said on X. “This is HUGE.”
And he’s right because this isn’t just a technical update.
This is about financial inclusion, and about making sure your full story gets told not just your credit card history.
What’s Changing?
Historically, mortgage lenders have only used FICO, a scoring model that doesn’t factor in things like rent, utilities, or phone payments, all bills that you likely pay on time, every month.
Enter VantageScore 4.0: a credit model that includes a broader range of financial behavior. That means:
- Rent payments
- Utility bills
- Telecom and subscription services
- Shorter credit histories
This update could help an estimated 33 million Americans who’ve been left out of traditional credit scoring. Of those, 13 million already have scores of 620+, which is the threshold for mortgage eligibility through Fannie Mae and Freddie Mac.
That’s potentially 5 million new homeowners who were previously told they didn’t qualify.
Why This Matters for You
At Femme Capital Partners, we serve women navigating financial turning points whether that’s buying a first home, rebuilding after divorce, or stepping into ownership solo for the first time.
Many of our clients have strong financial habits, but thin credit files. They pay rent religiously. They manage household bills. But they’ve never carried debt or had multiple lines of credit which traditionally penalized them in the eyes of mortgage lenders.
This change is a game-changer for those clients.
Will This Save You Money?
Let’s be honest your credit score matters, but it’s not the only cost in homebuying.
FICO recently raised its report cost from $3.50 to $4.95. While that’s caused some concern, it’s worth noting that closing costs for a mortgage average $6,000 or more, meaning the cost of your credit score makes up just 0.2% of your total expenses.
So no, this shift likely won’t lower your upfront costs dramatically. But it could mean:
- A better rate because your score now reflects more of your financial life
- More approval options for first-time or non-traditional borrowers
- Access to loan programs that were previously out of reach
What Happens Next?
Fannie Mae and Freddie Mac are working to update their systems to support VantageScore 4.0, but there’s no exact rollout date yet.
Still, the message is clear:
The mortgage industry is moving toward inclusion and modernization.
Credit invisibility is being challenged. And that opens the door — literally — for more people to become homeowners.
Key Takeaways:
- VantageScore 4.0 will soon be used alongside FICO in mortgage applications.
- It includes rental, utility, and telecom data, helping score more consumers.
- This could unlock mortgage eligibility for millions of overlooked buyers.
- While this won’t drastically cut closing costs, it may give you more paths to approval especially if your FICO score isn’t telling your full story.
📞 Book Your Credit Impact Review
No pressure. No judgment. Just expert insight — tailored to your life.
- Get clarity on how lenders see you
- Build a smart path to homeownership — even if you’ve been denied before
- Move forward with strategy and confidence
Find out if the new scoring model could open more mortgage doors for you. Book a free call and let’s review your options together.