CrossCountry Mortgage is reporting an estimated $2,500 in average borrower savings from its adoption of VantageScore 4.0, adding to a growing body of lender-reported results showing how competition between credit scoring models is translating into lower loan costs.
The Cleveland-based lender said Thursday that, during its first 60 days of implementation, loans receiving a more favorable credit score through VantageScore 4.0 saw an average reduction of 62 basis points in loan-level pricing adjustments (LLPAs).
Based on preliminary internal data, CrossCountry estimated that reduction translated into average savings of $2,500 per transaction. The figures apply to loans where VantageScore produced a more favorable result, rather than the lender's entire loan portfolio.
The significance extends beyond which scoring model a lender accepts. The ability to obtain a more favorable qualifying score can affect loan pricing, potentially giving borrowers access to better terms without changing their underlying credit profiles.
Lenders Begin Putting Numbers Behind Credit Score Competition
CrossCountry's findings follow earlier results from Rocket Mortgage, which reported average closing-cost savings of approximately $1,600 among borrowers who benefited from its use of VantageScore 4.0.
Rocket announced in September that it was making VantageScore 4.0 its preferred credit scoring model for eligible retail loans following internal testing.
UWM has also moved to capitalize on the expanded scoring options, introducing automated selection of the highest qualifying score and removing its minimum credit score overlay on eligible conventional loans.
The developments illustrate how lenders are beginning to incorporate credit score choice into their pricing and underwriting strategies.
The shift follows the Federal Housing Finance Agency's decision to allow lenders delivering eligible loans to Fannie Mae and Freddie Mac to use VantageScore 4.0 as an alternative to Classic FICO.
Fannie Mae subsequently aligned its loan-level price adjustment framework for the two models, effective Oct. 1, reducing a potential pricing distinction between loans evaluated using Classic FICO and those evaluated using VantageScore 4.0.
CrossCountry Removes 80% LTV Restriction
CrossCountry said it is expanding VantageScore 4.0 eligibility across the full range of permitted loan-to-value ratios for Fannie Mae and Freddie Mac loans, removing its previous 80% LTV cap.
That change could be particularly relevant for purchase borrowers with down payments below 20%, who previously fell outside CrossCountry's stated LTV restriction.
The expansion gives the lender's LO additional flexibility to evaluate eligible conventional borrowers using VantageScore 4.0, subject to applicable agency, underwriting, and mortgage insurance requirements.
CrossCountry also announced an expansion of its VA lending options for eligible veterans and active-duty service members.
"Our customers shouldn't have to wait for the industry to catch up before they can take advantage of new technology and new options," said Brian Clark, director of product and pricing at CrossCountry Mortgage. "We saw an opportunity to give our loan officers another tool to help qualified borrowers. This demonstrates how additional flexibility can translate into meaningful benefits for our customers."
Competition Moves Beyond Credit Report Pricing
FICO, whose Classic FICO model has long dominated conventional mortgage lending, recently introduced a $10 bundled offering combining Classic FICO and FICO Score 10T through participating tri-merge resellers.
TransUnion has also extended its 99-cent VantageScore 4.0 pricing offer through 2028, while Equifax has introduced Mortgage Score Select, giving lenders additional options for evaluating mortgage credit.
Those developments have largely centered on the cost and availability of credit scores. CrossCountry's results highlight another financial consideration: the effect of a borrower's qualifying score on loan-level pricing adjustments.
A relatively small change in credit score can affect the pricing category into which a borrower falls, depending on the loan's characteristics and applicable agency pricing requirements.
A New Consideration
Originators working with lenders that offer both Classic FICO and VantageScore 4.0 may have additional opportunities to identify favorable pricing for eligible borrowers. The outcome depends on the borrower's credit profile, loan characteristics, and the lender's implementation of the scoring models.
CrossCountry's decision to eliminate its 80% LTV restriction adds another dimension, potentially extending that flexibility to a broader group of conventional purchase borrowers.
For an industry accustomed to operating under a single dominant mortgage credit scoring framework, the emerging competition is beginning to show up where it matters most to borrowers and originators: the price of the loan.
