# How could new credit score rules affect homebuyers? By Chelsea Levinson, JD | 2022-10-28 > Thanks to newly implemented rules, nearly 70% of medical debts are being dropped from US credit reports, causing increases to some credit scores. Plus, a new credit scoring model is shaking up how lenders might look at debts. ## Key Takeaways ## Key takeaways - In early 2022, Experian, Equifax, and TransUnion announced changes to medical debt collection reporting that could cut nearly 70% of medical collection debt from US credit reports.  - There’s also a new credit scoring model called FICO10 that could affect individual credit scores by 20 points or more. - Homebuyers may see score changes because of these new rules, which may affect their mortgage approvals and interest rate offerings. If you're planning to buy a home, a behind-the-scenes change could directly affect whether you qualify for a mortgage — and the interest rate you're offered. The Federal Housing Finance Agency (FHFA) has mandated that Fannie Mae and Freddie Mac transition to newer credit scoring models, replacing a system that has been in place for nearly two decades. According to [FHFA's October 2022 announcement](https://www.fhfa.gov/news/news-release/fhfa-announces-validation-fico-10t-and-vantagescore-40), lenders who sell loans to the GSEs must now adopt FICO 10T and VantageScore 4.0 — a shift that impacts millions of borrowers. Whether you're a first-time buyer, rebuilding credit, or refinancing, here's what you need to know about the new mortgage credit score requirements and how to prepare. [Get your offer](#) ## What Are the New Credit Score Rules for Mortgages? For years, mortgage lenders relied on the **classic FICO tri-merge model** — pulling your credit report from all three bureaus (Equifax, Experian, and TransUnion) and using the middle score to evaluate your application. That system is being replaced. Under the FHFA mandate, Fannie Mae and Freddie Mac are transitioning to: - **FICO 10T** — the latest generation of the FICO scoring model, which incorporates trended credit data (how your balances and payments have moved over time, not just a single snapshot). - **VantageScore 4.0** — a competing model developed jointly by the three credit bureaus, also using trended data and designed to score more consumers, including those with thin credit files. ### What "bi-merge" means for borrowers Perhaps the most significant operational change is the move from a **tri-merge to a bi-merge credit model**. Instead of pulling reports from all three bureaus, lenders will now pull from only two. Your qualifying score will be the lower of the two, rather than the middle of three. **Key timeline:** - **2022:** FHFA announced the transition - **2024–2025:** Phased industry rollout and lender system updates - **2025–2026:** Full GSE adoption required for loans sold to Fannie Mae and Freddie Mac This shift matters because FICO 10T and VantageScore 4.0 weigh credit behavior differently than legacy models. Borrowers who have been steadily paying down debt may see their scores rise, while those who have recently increased balances could see a drop. ## How the New Rules Affect Different Homebuyers The impact of updated credit score rules for home buying isn't uniform. Your experience depends largely on your credit profile. ### First-Time Buyers With Limited Credit History If you have a **thin credit file** — meaning fewer than five accounts or a short credit history — the new models could work in your favor. VantageScore 4.0 is designed to [score approximately 37 million more consumers](https://www.vantagescore.com/press-releases/vantagescore-4-0-model-now-available/) than older models by incorporating alternative data like utility and rent payments. For first-time buyers who've been responsibly paying bills but haven't built traditional credit, this opens a new path to [homeownership](https://www.opendoor.com/articles/briefs/how-long-does-it-take-to-buy-a-house). ### Buyers With Mixed or Recovering Credit Trended data cuts both ways. If your credit history shows a clear pattern of paying down balances and making on-time payments over the past 24 months, FICO 10T may reward that trajectory with a higher score. However, if you've been carrying rising balances — even while making minimum payments — your score could decrease compared to the classic model. ### Repeat Buyers and Refinancers If you already own a home and are looking to refinance or purchase a new property, pay attention to the bi-merge change. Under the old system, one outlier bureau score was effectively neutralized by the middle-score approach. With only two scores, a single bureau reporting a lower number carries more weight. Before applying, review your credit reports from all three bureaus to identify any discrepancies. ## Minimum Credit Score for a Mortgage by Loan Type (2026) Understanding where you stand starts with knowing the baseline requirements. Here's a breakdown of the **minimum credit score for a mortgage** by loan program: | **Loan Type** | **Minimum Credit Score** | **Down Payment Requirement** | **Notes** | | **FHA** | 580 (3.5% down) / 500 (10% down) | 3.5%–10% | Most accessible for lower-credit borrowers | | **Conventional** | 620 | 3%–20% | Required for loans sold to Fannie/Freddie | | **VA** | No official minimum (~620 lender overlay) | 0% | Available to eligible veterans and service members | | **USDA** | 640 | 0% | For rural and suburban properties | | **Jumbo** | 700+ | 10%–20% | Varies widely by lender | **Important:** These are *program minimums*. Most lenders apply their own **overlays** — stricter requirements that may push the effective minimum score 20–40 points higher. As lenders calibrate to FICO 10T and VantageScore 4.0, these overlays could shift. Buyers exploring how to [budget for a home purchase](https://www.opendoor.com/articles/how-much-does-it-cost-to-buy-a-house) should confirm current requirements with their lender. ## How Your Credit Score Affects Your Mortgage Rate Your credit score doesn't just determine *if* you qualify — it shapes the **rate you'll pay** over the life of your loan. Mortgage rate tiers are structured around score bands, and even a modest difference can cost thousands. Here's a simplified example based on [Freddie Mac's historical rate data](https://www.freddiemac.com/pmms) for a 30-year fixed mortgage on a $350,000 home: | **Credit Score Range** | **Estimated Rate** | **Monthly Payment (P&I)** | **Total Interest Over 30 Years** | | **760+** | 6.5% | $2,212 | ~$446,300 | | **700–759** | 6.75% | $2,270 | ~$467,300 | | **660–699** | 7.15% | $2,364 | ~$501,000 | | **620–659** | 7.75% | $2,508 | ~$552,800 | The difference between a 760+ score and a 620 score in this example is roughly **$296 per month** — or over **$106,000 in additional interest** over the life of the loan. That's why improving your score before buying is one of the highest-return financial moves you can make, alongside [saving for a sufficient down payment](https://www.opendoor.com/articles/how-much-to-save-for-house). ## 6 Ways to Improve Your Credit Score Before Buying a Home Whether the new scoring models help or hurt your profile, these strategies can strengthen your position: 1. **Check your credit reports for errors.** Request free reports at [AnnualCreditReport.com](https://www.annualcreditreport.com/) and dispute inaccuracies — especially incorrect late payments or accounts that aren't yours. 2. **Pay down revolving balances.** Aim for a **credit utilization ratio below 30%** — ideally under 10%. Under trended data models like FICO 10T, a pattern of decreasing balances is especially beneficial. 3. **Avoid opening new credit accounts.** Each new application triggers a hard inquiry, and new accounts lower your average account age. Hold off on new credit cards or [financing a renovation](https://www.opendoor.com/articles/eight-ways-to-finance-your-home-renovation-project) right before applying for a mortgage. 4. **Keep old accounts open.** Length of credit history factors into every scoring model. Even if you don't use an older card, keeping it open supports your score. 5. **Become an authorized user on a seasoned account.** If a family member has a long-standing account with a strong payment history, being added as an authorized user can boost your profile. 6. **Set up autopay to ensure on-time payments.** Payment history is the single most influential factor in both FICO and VantageScore models. Even one missed payment can cause a significant drop. Starting these steps six to twelve months before you plan to buy gives you enough time to see meaningful improvement. ## Credit Score Rules for Mortgages in 2026: What to Expect The transition to new credit scoring models is still unfolding. Here's what borrowers should watch for through 2026 and beyond: - **Full GSE adoption.** Fannie Mae and Freddie Mac are requiring all lenders to submit loans using FICO 10T and VantageScore 4.0. Lenders still operating on legacy systems will need to complete their transitions in 2026. - **Lender overlay adjustments.** As lenders gather performance data on loans underwritten with the new models, expect [credit score requirements](https://www.opendoor.com/articles/real-estate-terms-you-should-know) and overlays to shift — potentially loosening for some borrower profiles. - **VantageScore's expanded role.** Historically, FICO dominated mortgage lending. With VantageScore now embedded in the GSE framework, its influence on mortgage qualification will grow significantly. - **Trended data becomes the norm.** Both new models analyze how your credit behavior has changed over time. This rewards borrowers on an upward trajectory and penalizes those trending negatively — a fundamental change from snapshot-based scoring. For buyers wondering [whether 5% is enough for a down payment](https://www.opendoor.com/articles/briefs/is-5-percent-enough-down-payment) or how to time their purchase, understanding these evolving standards is essential to planning effectively. ## Frequently Asked Questions ### What is the minimum credit score to buy a house in 2026? It depends on the loan type. FHA loans allow scores as low as 500 with a 10% down payment, or 580 with 3.5% down. Conventional loans typically require at least 620. VA and USDA loans have their own thresholds, and individual lenders may set higher minimums through overlays. ### Will the new credit score rules make it easier to get a mortgage? For some borrowers, yes. VantageScore 4.0 can score consumers with thin credit files who were previously unscorable, and FICO 10T rewards consistent debt repayment. However, borrowers with rising balances or inconsistent payment patterns may find qualification harder under trended data models. ### How much does your credit score affect your mortgage interest rate? Significantly. A borrower with a 760+ score could pay 1% or more less in interest than a borrower with a 620 score. On a $350,000 loan, that difference can exceed $100,000 in total interest paid over 30 years. ### What credit score model do mortgage lenders use now? Mortgage lenders are transitioning from classic FICO models (FICO 2, 4, and 5) to **FICO 10T and VantageScore 4.0**, as mandated by the FHFA. During the transition period, lenders may use either legacy or updated models depending on their implementation timeline. ### What's the difference between FICO 10T and VantageScore 4.0? Both use trended credit data, but they're developed by different organizations. FICO 10T is created by Fair Isaac Corporation, while VantageScore 4.0 is a joint product of Equifax, Experian, and TransUnion. VantageScore is generally able to score more consumers with limited credit history. ### What does "bi-merge" mean for my mortgage application? Under the new system, lenders pull your credit report from two bureaus instead of three. Your qualifying score is the **lower** of the two, rather than the middle of three. This means a single low-reporting bureau has greater influence on your application. ### How far in advance should I check my credit before buying a home? At least **six to twelve months** before you plan to apply for a mortgage. This gives you time to dispute errors, pay down balances, and allow positive changes to reflect in your score. Use that lead time to understand [the full costs of buying a home](https://www.opendoor.com/articles/how-much-does-it-cost-to-buy-a-house) as well. ### Can I still qualify for a mortgage with a low credit score? Yes. FHA loans are designed for borrowers with lower scores, and some lenders offer specialized programs for credit-challenged buyers. You may face a higher interest rate or need a larger [down payment](https://www.opendoor.com/articles/how-much-to-save-for-house), but options exist. Working with a HUD-approved housing counselor can help you find the best path forward. ### Do the new credit score rules apply to all mortgages? The FHFA mandate applies specifically to loans purchased by **Fannie Mae and Freddie Mac**, which represent the majority of conventional mortgages. FHA, VA, and USDA loans are governed by their respective agencies and may adopt updated models on different timelines. Portfolio lenders and jumbo loan providers set their own scoring standards. [Get your offer](#) ## The Bottom Line The shift to FICO 10T and VantageScore 4.0 is the most significant change to mortgage credit scoring in nearly 20 years. For many homebuyers — especially those with improving credit or thin files — the new rules could make homeownership more accessible. For others, the move to trended data and bi-merge scoring is a reminder that consistent, positive credit habits matter more than ever. The best thing you can do right now: **check your credit reports, understand where you stand under the new models, and start optimizing well before you apply.** The homebuying process already involves [inspections](https://www.opendoor.com/articles/home-inspection-checklist-for-buyers), [offers](https://www.opendoor.com/articles/how-to-determine-what-to-offer-on-a-house), [earnest money](https://www.opendoor.com/articles/earnest-money), and [closing timelines](https://www.opendoor.com/articles/how-long-does-closing-take) — your credit score shouldn't be the part that catches you off guard. Opendoor makes the homebuying and selling process simpler so you can focus on what matters most: finding the right home at the right time. --- *Originally published at [https://www.opendoor.com/articles/briefs/new-credit-score-rules-homebuying-affects](https://www.opendoor.com/articles/briefs/new-credit-score-rules-homebuying-affects)*