July 16, 2025
8 minutes
You’ve probably heard rumblings about a major Fannie Mae update involving credit scores. Maybe you’re wondering if this will mess with your mortgage application, or if it might help. We get it: Credit rules are confusing, and they change faster than interest rates sometimes. But don’t worry-we’ve got you.
In this guide, you’ll find out exactly what Fannie Mae’s new credit score policy means for you, whether you're a first-time buyer, refinancing, or exploring homeownership for the first time.
Key Takeaways:
- Fannie Mae is updating how it evaluates credit scores-this could expand your mortgage eligibility.
- Multiple credit scores may now be factored in, improving fairness and transparency.
- Lenders will adopt a two-score model, no longer relying solely on the middle score.
- These updates may lead to broader access to homeownership across diverse borrower groups.
What’s Changing with Fannie Mae’s Credit Score Policy?
The Move to Two Scores
Traditionally, mortgage lenders have relied on your middle FICO score (of three) to determine eligibility. Fannie Mae’s update changes that: going forward, lenders will use two scores instead of three-a move expected to increase equity and fairness.
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Inclusion of VantageScore 4.0
In addition to FICO scores, VantageScore 4.0 will become part of the evaluation. This model includes broader payment history data, including rent, utilities, and telecom bills-especially helpful if you’re "credit invisible" or thin-file.
Why It Matters to You?
Freddie Mac’s evolving approach isn’t just about lenders, it could change the game for buyers like you. Here’s how:
- Fairer evaluations: Renters and gig workers may finally see their creditworthiness recognized.
- Potential for better rates: With more inclusive data, you might qualify for more competitive mortgage terms.
- Broader access: Expands homeownership opportunities for underserved communities.
How to Prepare for the New Credit Score Model?
1. Check Your Credit Reports-All of Them
Even with only two scores being used, discrepancies matter. Get your reports from Equifax, Experian, and TransUnion, and verify every line.
Pro Tip: Visit AnnualCreditReport.com for free weekly reports.
2. Optimize New Score Inputs
- Make on-time payments for rent, utilities, and phone bills-they’re being counted now.
- Reduce credit utilization under 30%.
- Avoid opening new credit lines right before applying for a loan.
3. Choose Transparent Lending Platforms
Look for lenders and marketplaces that break down how your credit is evaluated, and who won’t blindside you with outdated criteria.
reAlpha Mortgage is a trusted home financing platform that emphasizes transparency, borrower empowerment, and real savings through its commission rebate program.
Tools That Can Give You an Edge
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Homebuyer Education Resources
Lenders working with the new score model often provide tools to understand how your score affects your rates. Look for score simulators and pre-approval platforms with soft pulls.
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FAQs
What is the new Fannie Mae credit scoring system?
Fannie Mae is switching to a dual-score model and including VantageScore 4.0, expanding credit data beyond the middle FICO score.
Will this help me qualify for a mortgage?
It could. The inclusion of rental and utility payments often helps lower-credit borrowers qualify.
Does this mean lenders will stop using FICO?
No. FICO will still be used alongside VantageScore 4.0 in a dual-score model.
Smarter Credit. Bigger Savings. Your Path to Homeownership Starts Here.
Fannie Mae’s new credit score model is leveling the playing field - and with reAlpha Mortgage, you can make the most of it.
When you buy with reAlpha, you can save thousands at closing through our exclusive rebate stack:
- 0.5% commission rebate when you work with a reAlpha agent
- 1% rebate when you bundle your mortgage through reAlpha Mortgage
That’s real money back in your pocket - for inspections, upgrades, or just a stronger financial start.
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Compliance Disclosures:
- NMLS ID: 1743790 (reAlpha Mortgage)
- This blog post is for informational purposes only and does not constitute an offer to lend.
- Rates, terms, and eligibility may vary and are subject to change. Please consult with an NMLS-licensed mortgage advisor.
- reAlpha and reAlpha Mortgage are affiliate entities.
- Fannie Mae is a registered trademark and is not affiliated with this content.
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Article by
Rocky Billore is a mortgage industry leader and Chief Sales Officer with over two decades of experience across residential and commercial lending. Since entering the industry in 2004, he has been directly involved in funding more than $1.4 billion in loans. A recognized expert in VA and government lending, Rocky combines deep program knowledge with a data driven, relationship-first leadership style. His work focuses on building scalable sales organizations, developing high performing teams, and aligning technology with real world lending outcomes to improve the homeownership experience.