Industry Engagement for Enterprise Credit Score Model and Credit Reports Initiative

On Sept. 11, 2023, FHFA announced the next phase of public engagement, with a goal to build on the feedback collected earlier this year and provide a forum for continued identification of a wide variety of issues, opportunities and challenges.

Interested parties who wish to participate in the upcoming forums and listening sessions, should send their name, affiliation and contact information to [email protected].

Those who wish to participate in the initial sessions should respond by Sept. 25, 2023.

As a reminder our work for this initiative will include:

  • Moving from the current Classic FICO credit score model to require lenders to use two credit scores generated by the FICO®Score 10 T and the VantageScore® 4.0 models.
  • Requiring two, rather than three, credit reports from the national consumer reporting agencies – moving from the current “tri-merge” report model to a “bi-merge” model.

We’ve created a partner playbook providing additional information about the initiative, including proposed timelines and FAQs. We’ll update the playbook regularly to add important information and links to resources as the implementation plan is finalized and the initiative progresses. So, check back often to make sure you’re on track.

Previous Announcements

As announced in October 2022, Freddie Mac and Fannie Mae are beginning the next phase of the Enterprise Credit Score Model and Credit Reports Initiative (see the FHFA fact sheet). Freddie Mac and Fannie Mae are asking industry stakeholders for feedback to inform implementation planning.

As a reminder our work for this initiative will include:

  • Moving from the current Classic FICO credit score model to require lenders to use two credit scores generated by the FICO®Score 10 T and the VantageScore® 4.0 models.
  • Requiring two, rather than three, credit reports from the national consumer reporting agencies – moving from the current “tri-merge” report model to a “bi-merge” model.

We’ve created a partner playbook providing additional information about the initiative, including proposed timelines and FAQs. We’ll update the playbook at least quarterly to add important information and links to resources as the implementation plan is finalized and the initiative progresses. So, check back often to make sure you’re on track.

Joint Enterprise Credit Score Solicitation Update

In accordance with the requirements of the Validation and Approval of Credit Score Models Rule (12 C.F.R. Part 1254), Freddie Mac and Fannie Mae published a Joint Enterprise Credit Score Solicitation to request applications from credit score model developers.

Following the completion of the assessment process outlined under the Rule, on October 24, 2022, the FHFA announced the validation and approval of both FICO Score 10 T and VantageScore 4.0 credit score models. After a multiyear transition period, Sellers will be required to deliver loans with both scores when available.

Please review the FHFA Fact Sheet and Freddie Mac Statement related to this change.

Background

In February 2020, the FHFA approved the joint Enterprise credit score solicitation in accordance with the FHFA Final Rule that establishes the process to be used by the Enterprises to validate and approve credit score models.

The joint credit score solicitation provided a detailed description of the Enterprise’s solicitation criteria for credit score model validation and approval and other important application requirements.

On November 10, 2020, the FHFA announced that the Enterprises would continue to support the mortgage market by using Classic FICO, while assessing alternative credit score models submitted in response to the Joint Solicitation issued earlier that year. This interim step was taken in accordance with the requirements in Section 310 of the Economic Growth, Regulatory Relief and Consumer Protection Act as required by the FHFA Final Rule.