Two of the nation’s largest credit bureaus are cutting the cost of mortgage credit scores as competition intensifies around the adoption of VantageScore 4.0.
TransUnion on Monday announced it has lowered the price of its VantageScore 4.0 mortgage origination scores to 99 cents.
“TransUnion is committed to lowering the cost of mortgage origination for every American looking to buy or refinance a home,” said Satyan Merchant, senior vice president and mortgage business leader at TransUnion.
Equifax Joins Pricing Shift
Similarly, Equifax now offers VantageScore 4.0 mortgage credit scores for $1. The pricing shifts indicate a roughly 90% reduction from typical mortgage score costs. This pricing shift aligns with the Federal Housing Finance Agency’s (FHFA) push to introduce greater credit score competition in mortgage underwriting.
“We view our role in expanding homeownership as a vital responsibility,” said Mark W. Begor, chief executive officer of Equifax. He said the move is designed to make it easier for lenders to evaluate the VantageScore 4.0 model and support federal efforts to make mortgage lending more affordable.
Like TransUnion, Equifax will continue offering VantageScore 4.0 at no cost to lenders who also purchase a FICO score through its platform. Industry observers say the coordinated price cuts by two of the three nationwide credit bureaus signal a major push to shift mortgage lending toward greater credit score competition. Regulators have encouraged this for several years.
FHFA Pushes For Scoring Competition
Mortgage underwriting in the United States has historically relied almost exclusively on scoring models developed by FICO. However, regulators and policymakers have increasingly advocated allowing alternative models, including those developed by VantageScore Solutions. The FHFA has been working with lenders and technology providers to implement VantageScore 4.0 in mortgage lending.
Equifax said over 250 mortgage lenders are already receiving free VantageScore credit scores when they purchase FICO scores. Over 40 Non-GSE lenders are using VantageScore exclusively for portions of their loan portfolios.
Expanding Access To Credit
VantageScore 4.0 is designed to provide a more comprehensive view of consumer credit behavior. It incorporates trended credit data and alternative payment histories such as rent, utilities, and telecommunications payments. These additional data sources can help lenders evaluate borrowers with limited traditional credit histories, potentially expanding mortgage eligibility without increasing risk.
The model can generate a score with as little as one month of credit history while analyzing up to two years of historical credit data, according to Equifax. TransUnion said its version of the model leverages up to 30 months of trended credit data, providing lenders with a deeper view of how borrowers manage credit over time.
Pressure From Rising Housing Costs
The push to reduce mortgage origination costs comes as affordability pressures continue to weigh on the housing market.
“The total cost of owning a home has increased significantly since 2020, with American homebuyers challenged by increasing home values, high interest rates, and rising taxes and insurance,” said Joel Rickman, senior vice president and general manager of U.S. mortgage and verification services at Equifax.
Equifax also said it will continue providing additional borrower insights alongside its mortgage credit reports at no additional cost. These insights include employment indicators from its The Work Number database and alternative payment data from utilities, telecom, and pay-TV providers.
The growing push toward alternative data and competing scoring models reflects a broader effort to modernize mortgage underwriting and expand access to credit. These changes could reshape how mortgage professionals evaluate borrowers in the years ahead, potentially fostering a more inclusive and efficient lending environment.
