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The FHFA’s move to accept VantageScore for GSE mortgages could reshape credit access. In this interview with Rikard Bandebo and Clayton Collins outline why expanding scoring models matters not just for regulators and lenders, but for rural communities, high-rent markets, and millions of consumers previously excluded from homeownership. Bandebo pulls back the curtain on the performance of VantageScore 4.0, its 24-month lookback, and it’s ability to score borrowers that legacy models could potentially overlook.
Bandebo also addresses the industry’s readiness challenge, from originators already back-testing their portfolios to lenders who risk falling behind. He breaks down pricing dynamics, bureau relationships, and what competition really looks like after decades. The message is clear: the lenders preparing now will gain ground. Those who hesitate won’t.
Bandebo also addresses the industry’s readiness challenge, from originators already back-testing their portfolios to lenders who risk falling behind. He breaks down pricing dynamics, bureau relationships, and what competition really looks like after decades. The message is clear: the lenders preparing now will gain ground. Those who hesitate won’t.
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00:00Hi, I'm Clayton Collins, CEO of HousingWire, and we're here in Las Vegas, Nevada, here in the
00:12Expo Hall. And I'm joined by Ricard Bandebo, the Chief Strategy Officer and Chief Economist
00:18at VantageScore. Ricard, thanks for joining me. I'm delighted to be here, Clayton. All right,
00:23credit scoring, credit reporting, incredibly active and important topics in 2025. In July of
00:31this year, FHFA Director Bill Pulte made an announcement that Fannie Mae and Freddie Mac
00:35will begin accepting VantageScore. Tell us about what the last several months have meant for you
00:41since that announcement. I mean, it's been very, very positive for us. You know, we are big fans
00:47of competition and innovation in the mortgage space. We think it's going to be really, really good for
00:51the industry and for consumers. And it's good, I think, to see, you know, the 2018 Credit Reporting
00:59Act being put in place. So, no, very positive. All right, let's go deeper on the topic of
01:05competition. So, what has competition looked like in the past? What do you think it's going to look
01:09like in the future? Let's go deeper on that topic. Well, I mean, in the past, there hasn't been
01:13competition, right? Through sort of happenstance of fate, there's been only one score that's been
01:18allowed to be used for mortgages. And that score has been there since even before the last recession.
01:22Some of these scores go back to the 90s. So, it's a system that has been around a very long time.
01:28It's a system that the Federal Reserve found failed in 2008. They found that actually the score
01:32was a big issue at that time, but hasn't yet been changed. So, for the integrity of the system,
01:37and also just to enable the millions of consumers that have been left behind by the current scoring
01:42system who actually are creditworthy and should be able to have a house, we think this is really
01:47positive. Is the millions of consumers that have been left behind a conversation that you have with
01:53lenders and other stakeholders in the housing market? Every day. I think this is what excites
01:58them the most, right? Because this is, you know, a house is one of the most important things that
02:04people buy in their lives. It's also the biggest ability that people have to create generational wealth.
02:09So, from a consumer perspective and from an organizational perspective, it's a really big
02:14deal. And when lenders see an opportunity, particularly when the housing market's pretty
02:18tough, to be able to lend to more people without increasing risk, that excites them.
02:23So, from your point of view, what are the characteristics or strategic elements of Vantage
02:28Score that help open that credit box and make houses and housing more accessible?
02:34So, there are a few things. The legacy score has some restrictions on it.
02:39Which exclude tens of millions of U.S. consumers, right? Because Vantage Score 4 uses up to 24
02:47months of history, it's able to then actually build a much more accurate profile and score
02:52people that would otherwise not have been scored. Also, it uses rental data, utilities data, and
02:58other data that can give really good insights into how a person will perform on a mortgage.
03:02I mean, at the end of the day, think about it, right? The rent check is probably the biggest
03:06outlay people have on an ongoing basis, right? So, if you're trying to understand how they'll perform
03:11on a mortgage, seeing how they did on rent is an absolute winner.
03:15I mean, so rent is probably the most important element for first-time homeownership. Do you
03:21believe an ecosystem where rent or Advantage Score is used for mortgage underwriting, that
03:28first-time homeowners have a new advantage? Or we open the box for first-time homeownership
03:33to expand faster? With Vantage Score, about 5 million more households should just be eligible
03:39to get a mortgage in the new system, okay? And that's before you add rental data. With rental
03:44data, there should be many, many more consumers who should be able to be either eligible for a
03:50conforming mortgage or be eligible for better pricing. What does the housing market look like
03:55when 5,000 new borrowers are eligible? It's a great question. The reality is, is where we see
04:01most of these people that have been left behind by the current system, they tend to be actually in
04:05rural areas or in areas that have traditionally been high rental areas, where there hasn't been
04:11much demand for buying housing, right? And so, that could actually be very, very beneficial for
04:16those communities. It can help drive the economy in those communities and create a better wealth
04:22system in those communities. Yeah, I mean, we always talk about a national housing market,
04:26but we know it's a collection of hundreds or thousands of local markets, which all have
04:32different dynamics. I mean, I've seen a lot of supply and demand analysis by market in the U.S.,
04:38and markets like Austin are performing very different from markets in the Midwest, where
04:44supply has actually been a little bit tighter. Yeah, or for instance, you know, when we look at
04:49Varnish Score and some of the states where there's the biggest ability to score more people,
04:54West Virginia tops that state with over 20% of the population of West Virginia not scored under
05:01the current model that would be scored under Vantage Score 4. Okay, so since Director Pulte came
05:07out with the announcement that Fannie and Freddie would start accepting Vantage Score, there's been
05:11debate, there's been different viewpoints, and there's been misunderstanding. What do you think the
05:16mortgage market has misunderstood about Vantage Score and what Fannie and Freddie accepting Vantage Score
05:23might mean for them? It's a change in a system that hasn't changed for over 30 years. So it's
05:29always going to be quite hard for people to understand exactly how that's going to happen.
05:33But the good thing is, like, we're seeing such appetite from the large mortgage originators,
05:38from the CRAs and resellers, from the insurance companies. So there's a huge appetite to get this
05:44going. Everybody believes in this competition, and everybody believes we'll be able to score more
05:49people. I think where some of the confusion lies is, unfortunately, like in many things these days,
05:55there's a lot of misinformation out there. And so we do our best to try to correct that. But I think
06:00what people should do is to look at the independent sources, right? Look at whether it's the investment
06:05banks that have done analysis on the different scores and written reports on it, or people like
06:10JP Morgan Chase or Bank of America or Bloomberg. Go to those sources, right? You know that they're
06:16relatively independent when it comes to the types of analysis. Great sources, but not the sources that
06:20loan originators or consumers are going to be visiting. I mean, I get all the equity analyst
06:24reports, but they're not widely distributed. I think for a consumer, I mean, most consumers,
06:31when they look at their own credit score, bondage score is the score that they're most likely to see.
06:35Okay. Right? So we were a pioneer in consumer display. And for the past 15 years or so,
06:42where we've seen that whole consumer display market increase, we've been by far the most used
06:47score in that area. So it's not an alien concept to them, whether they go to Credit Karma, whether
06:51they go to Chase or wherever to look at their credit score, it's a score that they see on a
06:56regular basis. Okay. So I definitely see the potential for consumer impact and industry impact.
07:02What about with the originators themselves? Is there work to be done within their own four walls of the
07:08large originators to prepare their operations for vantage score?
07:12I mean, the large ones have gone back, they've done their homework, they've, you know, they've
07:16back tested and looked at all their historic data to understand how vantage score four will look like
07:21on their own portfolios. So the big one's already there. Okay. And what I would say is that for those
07:26that are kind of the next step down, haven't quite done this yet, we definitely recommend that you do
07:30this because at the end of the day, if you don't, your competitor is, and they're going to be able to get
07:34more customers than, so I think that's a pretty big deal. So when I talk to originators, they all
07:39want to serve more consumers and do more loans, but they're also price sensitive at a report level.
07:46And so what does vantage score mean for originators who are concerned about like the price they pay
07:51for credit data? We've seen all the three national credit reporting agencies come out and publish
07:57what their plan pricing is for vantage score. And they've also put out several deals or to provide,
08:04a lot more easy access to those that are using the legacy score. So we think that is great. We think
08:10that they have heard what Pulte is looking for and they've responded in kind. And now we're actually
08:17seeing real competition because remember up to this point, we've seen the price of these scores go from
08:23what near 30 cents to now $10 next year. I mean, you know, that's not a small increase over a very short
08:30period of time. So again, I think that having another score there, one particularly that is
08:36more competitive, it's going to be great. And it's probably going to have to help a lot in the end
08:42for the cost that the consumer and the originators are going to have to bear.
08:45You mentioned the three bureau partners. Can you tell us a little more about the relationship between
08:49the bureaus, advantage score, kind of how like decisioning and pricing works out?
08:54Certainly. So we are an independent organization, but we are co-owned by the three national credit
09:00reporting agencies, Equifax, Experian and TransUnion. And so it's been a great partnership.
09:08They actually created us for the purpose of creating a competition in this space. So,
09:14you know, it's been great. We've had huge success in credit card, personal loans, auto. But until this
09:19point, until Pulte came out with that tweet in July, we've been kind of kept out of mortgage. So for now
09:24is the first time we're able to compete in mortgage. And that's fantastic. But no,
09:28it's a great partnership. And it's enabled us to really differentiate, to provide models that
09:32if each bureau has the same information on the file, then you get the same score for each bureau.
09:38And that's quite unique and really valuable as you're issuing mortgages.
09:42Yeah, that definitely does sound like valuable, like consistent data there. I saw your press release this
09:48morning and online adoption of lenders using Vantage Score or signing up for the portal has been
09:55stratospheric in the last few months. Tell us a little bit more about that.
09:59Well, it's great. As you know, obviously, we're seeing a lot of the large originators starting to
10:04pull Vantage Score in now as they're preparing for the transition. We've seen a lot of focused lenders
10:07doing the same thing, as I mentioned, those that are focused on a mission. And we're also seeing those
10:12that don't just go to the GSEs, but perhaps submit loans to the VA or to the FHFA loan banks have been
10:19beginning to pull our scores so that they can begin preparing their loans for those types of
10:23securitizations as well.
10:24Okay, so we have an opportunity here and a platform to go kind of one-on-one conversation that's listened
10:30to and watched by many. What are some of the harder questions you're getting that you need to answer
10:36to bring confidence to all these people that are still, you know, kind of scratching their heads about
10:40what the future of credit reporting looks like? When change happens, there's a level of anxiety
10:45that kicks in. It's funny, for an industry that changes frequently, we don't like change very much.
10:51Well, I mean, again, when you've had something that's run the same way for a long time,
10:55which was probably implemented way before you even started working at that organization,
10:59right, where that historical knowledge of implementing it the last time is gone,
11:02there's always going to be some aspects of that that are going to make people think like,
11:06whoa, are we ready for this, right? But the good thing is, you know,
11:10all the tools are there, the bureaus are there to provide their support. So once you start putting
11:15the foot in, I think everybody's getting very comfortable with the support and with all the
11:18information that's available to ensure that they can make the right decision.
11:22All right, so we've talked a lot about Vantage Score through the lens of mortgage,
11:25but let's talk about other lending verticals where Vantage Score has had adoption and found
11:31traction. Give us a glimpse into that, Ricard.
11:33Yeah, so Vantage Score 4 was launched in 2017.
11:35So we have quite a long track record of that being available. And actually, as of now,
11:41we are the most used credit score in the United States, much because of its adoption in other
11:45products like credit cards, auto loans, and personal loans. And we now have over 3,700 financial
11:51institutions that are actively using Vantage Score today.
11:54Okay, so shifting back over to mortgage, do you have any advice or what would you tell originators
12:00to do now if they're interested in comparing their current credit reporting strategy to
12:06Vantage Score or making the first step to this competitive future?
12:10I would definitely encourage them to reach out to their credit bureaus. Vantage Score actually
12:14offers a customized report to help mortgage originators understand what the increase in
12:19addressable market would be were they to switch to Vantage Score based on their footprint.
12:23So that can help them get an understanding of the financial impact of making the switch.
12:27So that's interesting. So like the go-to-market is fueled by their existing credit bureau partner,
12:33not directly through Vantage Score?
12:34No, it's fueled on the originator's footprint.
12:38Okay.
12:38So if they're, for instance, an originator in Wisconsin, we can then pull what is going to
12:42be the increased addressable market for them based on their footprint in the different counties of
12:47Wisconsin.
12:47All right, that makes a lot of sense. Well, Ricard, I can't thank you enough for taking time away from
12:51this busy event and this busy expo hall to have this conversation with me. It's been a pleasure.
12:55Thank you, sir.
12:56It's been delightful. Thank you.
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