Pulte orders Fannie, Freddie to let all lenders use VantageScore; FICO drops
U.S. Director of Federal Housing Bill Pulte instructed Fannie Mae and Freddie Mac to permit all lenders to utilize the credit scoring system VantageScore, effective immediately. The initial rollout of VantageScore by Fannie and Freddie has been a resounding success, with 50 lenders delivering loans. Pulte emphasized that FICO had previously held a monopoly, but no longer would.
He criticized the three credit reporting agencies that own VantageScore, stating that they have been overcharging Americans for far too long. Pulte hinted at the possibility of a bi-merge and stronger solutions to address this issue. VantageScore, founded in 2006, is a joint venture of Equifax, Experian, and TransUnion. The Trump administration aims to lower costs for American homebuyers and increase competition in the mortgage credit scoring market, previously dominated by FICO.
The Credit Score Competition Act, signed into law by President Donald Trump in 2018, directed the U.S. Federal Housing to allow Freddie Mac and Fannie Mae to approve more advanced credit score models for mortgage underwriting.
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