The practical question to ask your lender is:
“Can you compare my qualification using Classic FICO and VantageScore 4.0 and tell me whether one gives me better loan pricing?”
As of September 9, 2026, Fannie Mae and Freddie Mac allow approved lenders to use VantageScore 4.0 for eligible mortgages, instead of relying only on the traditional Classic FICO model.
Why does this matter?
VantageScore 4.0 uses a newer credit-scoring approach and can recognize additional information, including rental-payment history when that information is reported. This may help some borrowers who responsibly pay their bills but have a limited traditional credit history. FHFA has said the modernization is intended to expand access to credit while maintaining mortgage risk standards.
A different score could potentially help a borrower qualify for a loan or fall into a more favorable loan-level pricing category. Fannie Mae specifically notes that VantageScore 4.0 loans are subject to its loan-level price adjustment matrix.
That does not mean VantageScore 4.0 automatically lowers your mortgage rate. But if the new model produces a stronger qualifying credit profile for you, it could potentially lead to better loan terms or a lower rate.
Tip: Try to keep your credit-card balances below 30% of your limit—and lower is even better.
Your credit score plays a major role in your mortgage rate, along with your income, assets, debts, and debt-to-income ratio.
I learned this lesson from my own experience. I always paid my credit cards in full and thought I was doing everything right. Then I noticed my brother, who had only been in the U.S. for two years, already had a FICO score over 800. It made me curious.
One simple difference was that he kept his credit-card usage very low.
That was a good reminder for me: sometimes it is the small things we don’t know that can make a difference.
Call Juliana Lee Team at 605.857.1000 or email to [email protected] for any questions..