Rocket Mortgage will make VantageScore 4.0 its default credit model

Rocket Mortgage's decision to make VantageScore 4.0 its default credit model is a significant development in the mortgage industry, particularly for homebuyers and refinancers in our local market. By adopting this more inclusive credit scoring model, Rocket Mortgage may be able to provide more favorable loan terms to a wider range of borrowers. This change could lead to increased access to credit for individuals who may have been previously excluded or offered less favorable terms.

The use of VantageScore 4.0 is notable because it considers a broader range of credit data and provides a more nuanced assessment of a borrower's creditworthiness. According to Rocket Mortgage, a 4-month test using 1.4 million reports showed that the new model helped some borrowers qualify for loans and improved pricing outcomes. This suggests that the adoption of VantageScore 4.0 could have a positive impact on the mortgage application process, making it easier for more people to secure loans.

As the mortgage industry continues to evolve, it's likely that other lenders will take a closer look at VantageScore 4.0 and its potential benefits. We should watch to see if other major lenders follow Rocket Mortgage's lead and adopt this credit model. Additionally, it's worth monitoring how regulators and industry experts respond to the increased use of VantageScore 4.0 and whether it leads to changes in the way credit scoring is used in the mortgage application process.

Originally reported by housingwire.com. LodgeNews adds analysis for real estate & property readers.