New Mortgage Credit Scores: Your FAQs Answered

One of the most common reasons people put off buying a home is fear of their credit — the worry that their score isn't good enough to qualify. The good news is that the mortgage industry is changing how credit scores are calculated, and those changes may help more buyers than they hurt. At The Gilli Team at Fairway Home Mortgage in Puyallup, WA, we help nervous buyers work through exactly this kind of worry every day, and this guide breaks down the biggest credit-score change in decades in plain terms.

What is the big change with mortgage credit scores?

For decades, mortgage lenders had one choice when it came to credit scores: Classic FICO, a single snapshot of your credit at the moment it's pulled. That era is ending. In October 2022, the Federal Housing Finance Agency (FHFA) validated two new scoring models — FICO Score 10T and VantageScore 4.0 — for use on loans sold to Fannie Mae and Freddie Mac (UQUAL).

VantageScore 4.0 was developed jointly by the three major credit bureaus — Equifax, Experian, and TransUnion — as a direct alternative to FICO. On July 8, 2025, FHFA Director Bill Pulte announced that Fannie Mae and Freddie Mac would accept VantageScore 4.0 immediately, giving lenders a real choice for the first time (HousingWire).

The biggest difference is how the models look at your history. Classic FICO takes a snapshot of your balances and payments on one single day. The newer models use trended data — they analyze up to 24 months of your payment behavior to see whether your balances are going up, down, or staying flat. That means a borrower who has been steadily paying down debt looks better under the new models than they did under the old snapshot approach (UQUAL).

Why is the mortgage industry moving to VantageScore?

Here are the main pros of the switch:

• Trended data rewards consistency. Instead of a single snapshot, VantageScore 4.0 and FICO 10T look at up to 24 months of your payment patterns. Consistent, on-time payments and steadily falling balances can help you qualify for better terms sooner (UQUAL).

• Borrowers with thin credit files can finally get a score. Under Classic FICO, you needed at least one account reported within the past six months to generate a score. VantageScore 4.0 removes that requirement, which is a big win for veterans, recent immigrants, and anyone rebuilding after hardship (UQUAL). VantageScore estimates about 5 million additional Americans could qualify for a mortgage under the new model (UQUAL).

• Two models means more choice and lower cost. VantageScore and FICO now compete on price, which can push down credit report fees and speed up loan processing (HousingWire).

What are the possible cons or challenges of the new models?

For most buyers the new models are good news, but the transition isn't perfect. Here's what to watch out for:

• The score the lender uses may not be the score you see. VantageScore 4.0 and FICO 10T can give different results for the same borrower, and lenders choose which model to use on each loan. Your free banking-app score may not match what your mortgage lender sees (VantageScore).

• The transition takes time and can be inconsistent. FICO Score 10T was validated back in 2022 but full rollout is still landing through 2026 and early 2027, and not every lender or program is on the same timetable yet (UQUAL).

• Trended data can cut both ways. The models reward borrowers whose balances are falling, but they can work against you if your credit usage has been creeping up over the past two years — even if today looks fine (UQUAL).

• Private lenders and insurers can still set their own minimums. Fannie Mae removed its hard 620 floor, but your specific lender or mortgage insurer may still require a higher score (UQUAL).

What's the difference between a soft pull and a hard pull?

A soft pull (also called a soft inquiry) is a look at your credit that does not affect your score. Checking your own score, a pre-qualification, or a lender's rate check are all soft pulls — they let you see where you stand without any penalty. A hard pull is what happens when you actually apply for credit, such as a mortgage, car loan, or credit card — a full inquiry that appears on your credit report and can cost you a few points for a short time.

Here's the key: when you're mortgage shopping, multiple hard pulls for the same type of loan within a short window are counted as one inquiry by the scoring models, so comparing lenders doesn't punish you. Some lenders, like the Gilli Team, will often do a soft pull on your credit when doing an initial preapproval.

Why does fear of a low score keep buyers out of the market?

One of the most common things holding would-be homeowners back isn't a low credit score — it's the fear of a low credit score. Many people assume they can't qualify, so they never ask. They avoid the conversation entirely, thinking a hard pull will hurt them or that a bad score means they're stuck renting for years.

The truth is that a licensed mortgage advisor can pull your credit, explain exactly where you stand, and build a step-by-step plan to improve it — long before you're ready to buy. Those "what if my score is bad" worries are usually worse in your head than they are on paper, and the new VantageScore models make a healthy score easier to reach than ever. The cost of not asking is far higher: years of waiting, rising home prices, and rent you'll never get back.

How can The Gilli Team help you prepare?

At The Gilli Team at Fairway Home Mortgage in Puyallup, WA, Kendrick and Janna Gilli have spent years helping homebuyers across Washington turn credit worry into a concrete plan. As loan officers, they do more than run numbers — they sit down with you, review your full credit picture, and map out the exact steps to raise your score before you ever apply for a loan (Fairway).

That conversation costs nothing and could change everything. Instead of guessing at your score or hiding from it, let a professional pull your credit, show you the good news in your report, and lay out a realistic timeline to homeownership. Whether you're a first-time buyer or coming back to the market after a setback, the new credit-score models mean your path to a home may be closer than you think — and the Gilli Team is ready to walk it with you.