These days, many people who come for consultations often ask the same question: why do the scores shown in their credit card apps differ from what the bank reports?

This year, a new system has been introduced. The credit scores used for mortgage underwriting have expanded from just FICO to include VantageScore 4.0.

So today, I will outline how this change actually affects my loan conditions step by step. The dates and criteria are based on publicly available information as of mid-October.

The starting point is the Credit Score Competition Act passed in 2018. The intent was to allow various credit scoring models to be used for loans purchased by Fannie Mae and Freddie Mac.

The Federal Housing Finance Agency (FHFA) decided to accept VantageScore 4.0 in October 2022. However, there was a preparation period of several years before it would be implemented.

The pace picked up on July 8, 2025, when the FHFA announced that lenders could choose between Classic FICO and VantageScore 4.0.

However, the announcement did not match reality. Due to unprepared pricing structures and systems, there were very few places actually using it for a while.

On April 22, 2026, some approved lenders began using it. On the same day, the FHA also announced that it would accept VantageScore 4.0 and begin the implementation process.

By September 3, the scope expanded to all lenders. It was reported that 50 institutions participated in the initial pilot phase.

Fannie Mae issued detailed rules in Lender Letter LL-2026-06 on September 9, and Freddie Mac released Bulletin 2026-H. The content is nearly identical.

There is a common misunderstanding here. The choice of which score to use is determined by the lender, not the loan applicant.

If there are two applicants for one loan, both must use the same model to generate their scores. You cannot mix FICO for one spouse and VantageScore for the other.

Manual underwriting, where the examiner reviews documents directly, still only uses Classic FICO. If you are going through manual underwriting due to a thin credit record, you should be aware of this first.

The tri-merge method of receiving reports from all three credit bureaus remains unchanged. The bi-merge method, which uses only two, is under review by the FHFA and is not yet a confirmed policy.

So how different are the scores themselves? Both models range from 300 to 850, but the calculation methods differ.

VantageScore 4.0 reflects trend data showing how balances have changed over time. Those who have consistently reduced their card balances may benefit, while those who have gradually increased them may be at a disadvantage.

Another difference is that medical debt delinquency records are excluded from the score calculation. If you had your score lowered due to a single medical collection, the outcome may change.

VantageScore emphasizes that it can generate scores even without recent credit activity. This may apply to retirees who rarely use cards or families in the early stages of immigration, but keep in mind that this is a claim from the company.

The pricing issue was a bit more complex. Initially, a fee schedule based on FICO was applied with a 20-point increase for VantageScore.

In simple terms, this meant that the top tier corresponding to a FICO score of 780 had to be 800 for VantageScore. This structure could potentially disadvantage someone if their VantageScore was not high enough.

At the end of September, an announcement was made to merge this dual system into a single pricing table. According to guidance from Fannie Mae and Freddie Mac, this will apply to loans settled after October 1.

This means the 20-point adjustment will be eliminated, and VantageScore will be directly integrated into the FICO pricing table. In terms of fees, this provides a bit of relief for VantageScore.

However, some industry analyses suggest that while lenders save costs, consumers may end up paying more over the entire loan term. This analysis is based on the previous standards before the single pricing table, so there is room for consideration.

Opinions also vary regarding predictive power. VantageScore claims its model captures delinquencies better, while FICO argues that the comparison method is unfair.

So what should someone looking to buy a home do? Start by asking which model the lender uses during your first consultation.

Also, inquire whether you can check scores from both models. If there is a significant difference in scores, that alone can serve as a criterion for choosing a lender.

It's advisable to gradually reduce your card balances a few months before applying. Since the model looks at trend data, a steady decrease is better than paying off everything at once.

Interest rates and fees vary based on individual credit status and loan conditions, so be sure to confirm actual estimates with your loan officer. It's most reliable to compare estimates from two or three lenders side by side on the same day.

From my decades of experience in this field, I've noticed that in the early stages of a changing system, those who gather information first tend to benefit, even if only slightly. I believe this change is similar, even if not significant.

If I were to advise someone with a thin credit record or medical collections, I would recommend looking for lenders that use VantageScore first. For those with solid records, compare the results from both models and choose the more favorable one.