VantageScore 4.0 Just Got a Big Pricing Win for Borrowers

The FHFA has leveled the playing field for VantageScore 4.0 borrowers by eliminating a 20-point scoring penalty — here's what that means for your mortgage rate.

If you've been quoted a mortgage using VantageScore 4.0 (VS4), there's some genuinely good news coming your way.

Up until very recently, Fannie Mae and Freddie Mac were applying a 20-point penalty to VS4 credit scores when calculating loan-level pricing adjustments (LLPAs) — the fees that directly impact your mortgage rate. The reasoning was that VS4 scores tend to run higher than Classic FICO scores across the board, so they discounted them to make the models comparable.

The FHFA just reversed that. Both scoring models will now use the same single pricing matrix, effectively eliminating that 20-point haircut on VS4 scores. For borrowers whose lenders use VS4, this could mean lower pricing adjustments and a better rate — without changing anything about your actual credit profile.

What does this mean practically? If you were on the fence about whether your credit score qualified you for a better rate tier, it's worth getting a fresh look. Small pricing improvements can translate into meaningful savings over the life of a 30-year loan.

We're watching how lenders roll out this change and are ready to help you understand exactly how your credit score — whether FICO or VantageScore — affects your loan pricing today. Reach out to us for a free rate review.