New Credit Score Models Are Changing Who Can Qualify for a Mortgage in Texas

If you have been told in the past that your credit score was not quite there for a mortgage, this week’s news is worth paying attention to. The Federal Housing Finance Agency (FHFA) and the Department of Housing and Urban Development (HUD) jointly announced that Fannie Mae, Freddie Mac, and the Federal Housing Administration are now accepting two new credit scoring models: VantageScore 4.0 and FICO Score 10T. The change went into effect this week, and it represents the first major update to mortgage credit scoring in roughly two decades.

Here is what the change actually means, who it could help, and what Texas buyers need to understand before assuming a higher score is on the way.

What Changed and Why It Matters

For years, mortgage lenders selling loans to Fannie Mae and Freddie Mac were required to use Classic FICO scores (FICO 2, FICO 4, and FICO 5) pulled from all three credit bureaus in what is called a tri-merge report. These models have been around since the 1990s and were built before rent payments, buy-now-pay-later accounts, and the modern credit landscape existed.

The new models, VantageScore 4.0 and FICO Score 10T, are designed to be more predictive and more inclusive. The key differences buyers should know about:

• Rent payment history: VantageScore 4.0 can factor in on-time rent payments when that data is available through the credit bureaus. For renters who have been responsible payers for years but have a thin traditional credit file, this can result in a meaningfully higher score.
• Trended credit data: FICO 10T uses trended data, meaning it looks at how your balances have moved over time, not just what they are today. Paying down debt consistently over 24 months looks different under FICO 10T than a single snapshot of your balance would suggest.
• Bi-merge instead of tri-merge: Fannie Mae and Freddie Mac are also shifting from requiring credit pulled from all three bureaus to a bi-merge model, using the two highest scores instead of the middle score of three. This change alone can affect which score gets used in your loan pricing.

FHA is also permitting VantageScore 4.0 and FICO 10T for FHA-insured mortgage underwriting, which extends the impact to buyers using government-backed loan programs with lower down payment options.

Who This Could Help

The most direct beneficiaries are buyers who have been responsible with money but whose credit history does not fully capture that responsibility under the older scoring models. Specifically:

Renters With Strong Payment Histories

If you have paid rent on time for years through a property manager or management company that reports to the credit bureaus, VantageScore 4.0 can now count that history. Previously, rent payments were largely invisible to mortgage scoring models. For buyers who are transitioning from renting to owning, this is a meaningful change.

Borrowers Who Have Been Paying Down Debt

Under the older Classic FICO models, a snapshot of your current balances is what drives your utilization score. FICO 10T looks at the trajectory, so a borrower who has gone from 60 percent utilization to 20 percent over 24 months is evaluated differently than someone who has always been at 20 percent. Responsible paydown behavior gets rewarded more explicitly.

First-Time Buyers With Limited Credit History

Younger buyers and first-time buyers sometimes have thin credit files simply because they have not had decades to build them. The newer models can use more types of payment data to generate a score, which may reduce the number of buyers who show as unscorable or borderline under the old system.

What Has Not Changed

It is worth being precise here, because some coverage of this announcement has overstated what buyers can expect immediately.

The rollout is phased. Fannie Mae and Freddie Mac are currently accepting VantageScore 4.0 loans from an approved set of lenders in a limited rollout. Not every lender is yet set up to deliver loans under the new scoring models. Lenders who are not part of the initial rollout are still required to use Classic FICO scores through a tri-merge report.

The minimum score thresholds have not been eliminated. You still need to meet the floor requirements for each loan program. Conventional loans still require at least a 620 under most structures. FHA loans have their own floor. What changes is how your score is calculated and what factors feed into it, not the minimum bar itself.

The new models can also cut the other way. VantageScore 4.0 weighs late payments and high balances more severely than the older models in some cases. A borrower who scores higher under Classic FICO because of a thin but clean file may actually score lower under VantageScore 4.0 if their recent behavior includes any slips. The new models are more predictive in both directions.

What This Means Practically for Texas Buyers in 2026

If you have been on the fence about whether your credit is mortgage-ready, the answer right now is: it depends on more factors than it did six months ago, and that is actually a good thing for well-qualified buyers who were being disadvantaged by the old models.

Here is how to think about your situation:

If You Have Been Renting and Paying On Time

Ask us to run both a Classic FICO and a VantageScore 4.0 assessment when you start the process. If your rent payments are reporting to a bureau, your VantageScore may be meaningfully higher than your Classic FICO. That could affect which loan program makes the most sense for you.

If You Have Been Paying Down Balances

FICO 10T is likely to reflect your recent trajectory more favorably than the older snapshot-based models. If you have been disciplined about debt reduction over the past couple of years, your FICO 10T score may land higher than your Classic FICO score.

If Your Classic FICO Is Already Strong

The good news is that you are not required to use VantageScore 4.0 or FICO 10T. Classic FICO remains valid. For buyers who score well under the old system, there may be no practical difference at all. The new models expand access; they do not replace what is already working.

The Bigger Picture: Competition in Credit Scoring

This change is the result of the Credit Score Competition Act of 2018, which was designed to break up the near-monopoly that Classic FICO models had on mortgage underwriting and introduce competitive pressure that could benefit consumers. The implementation took years, but it is now live.

FHFA Director William Pulte noted at the announcement that the goal is to help creditworthy borrowers who were overlooked under the older system qualify for mortgages while also maintaining the predictive accuracy that protects the health of the overall mortgage market. The dual-model approach (lenders can use either VantageScore 4.0 or FICO 10T alongside Classic FICO) is intended to give lenders flexibility while the industry builds out the infrastructure to fully implement the new models.

For Texas buyers, the takeaway is straightforward: if you have been told before that your score was a barrier, it is worth getting a fresh look. And if you have never had a mortgage conversation before because you assumed your credit would not qualify, this is a good time to find out where you actually stand under both the old and new models.

We stay current on changes like this so we can give you an accurate picture of your options. Start with a prequalification and we will show you exactly where your scores land and what programs are available. Or reach out directly and we will walk through it together. You can also browse our loan options page to get familiar with the programs before we talk.

Ferrando Financial LLC | NMLS# 2403080 | Licensed in Texas. This content is for educational purposes only and does not constitute a commitment to lend. Loan approval is subject to credit, income, and property qualification. Credit scoring model availability is subject to lender participation and program guidelines, which are subject to change.