How a credit veteran wants brokers to think about VantageScore 4.0
“I bet if I looked at Vantage 4.0 for myself, which I haven’t, I’m not going to be an 850 because I have credit cards right now that are trending up like most people today,” Ault said.
Over the holidays, she said, a borrower might run up gift purchases and pay the cards off on Jan. 1. In her view, that borrower would still score lower on VantageScore 4.0 than on classic FICO.
“Classic FICO says, oh, it’s zero. That’s all we care about today. It’s a snapshot,” Ault said. “Vantage says, oh wait, they were going up, up, up, then they paid down to zero. Let’s wait and see, are they going to trend back up?”
What brokers should watch
FHA adopted the new models in a Mortgagee Letter that HUD issued Oct. 8, which adds FICO 10T and VantageScore 4.0 alongside classic FICO.
“January 1st of next year is going to be huge because that’s when FHA is going to take on Vantage 4.0, right?” Ault said. “And so when that happens, and lenders are using it for the FHA, that’s the market that Vantage is really good for.”
