A recent policy change allowing greater competition in mortgage credit scoring could generate nearly $650 million in annual savings for lenders and borrowers, according to a new analysis released by VantageScore.
The savings stem from the Federal Housing Finance Agency’s July 2025 decision to authorize the use of the VantageScore 4.0 credit model alongside legacy scoring systems for loans backed by government-sponsored enterprises (GSEs). The move introduced competition into a market long dominated by a single scoring provider and is expected to reduce credit score-related costs across the mortgage ecosystem.
The study, “Economic Benefits of Score Market Competition for Conforming Mortgages,” conducted by Deep Future Analytics, estimates that the introduction of credit score competition could produce approximately $648 million in savings during the first full year under a full adoption scenario. The report also found that borrowers and lenders could save an average of $111 per completed mortgage through lower credit score fees and improved efficiencies.
Cost Benefits Could Accumulate Significantly Over Time
“Mortgage credit score competition lowers cost, reduces mortgage risks, and improves predictive performance,” said Tony Hutchinson, EVP and head of public affairs at VantageScore. “This rigorous analysis from Deep Future Analytics confirms that the implementation of the 2018 Credit Score Competition Act generates significant mortgage credit score savings and improves consumer affordability while simultaneously reducing mortgage industry risk. We applaud Director Pulte’s decision to introduce mortgage credit score competition and deliver $600 million in cost savings to mortgage lenders and borrowers through the adoption of VantageScore.”
Beyond direct financial savings, the report highlighted potential operational and credit performance benefits. VantageScore 4.0 is designed to evaluate a broader range of consumers and can score approximately 33 million more Americans than traditional credit scoring models, expanding access to mortgage financing for borrowers with limited or non-traditional credit histories.
Industry stakeholders say the shift toward credit score competition aligns with broader policy efforts to improve affordability and efficiency in housing finance. By lowering credit score expenses and enabling more inclusive borrower evaluations, the FHFA’s decision could enhance both borrower access and lender risk management.
The findings reinforce the economic impact of introducing competitive credit scoring options into the mortgage market, signaling potential long-term cost reductions and expanded credit access as adoption of alternative scoring models accelerates.
