VantageScore mortgage usage plunged 42% in 2024

VantageScore credit score usage by the mortgage industry dropped in 2024, ahead of widespread changes expected in credit reporting in the coming years.

The decline was due to overall market conditions and a spike in portfolio analysis conducted by the government-sponsored enterprises (GSEs) in the previous year. Meanwhile, originators more than doubled their usage of the scores.

Data released on Monday by VantageScore, based on an analysis by Charles River Associates, showed that the usage of its credit score by mortgage originators, insurers and the GSEs declined by 41.7% in 2024 compared to the prior year.

In total, the number of uses fell to 502 million in 2024, down from 860 million in 2023, the data showed. The mortgage industry accounted for 1.2% of all VantageScore usage last year, compared to 3.2% in 2023.

But when considering only mortgage originations, the usage of the credit score surged by 166% in 2024, according to the data. 

“The decline in the broader mortgage market may well reflect the less portfolio rescoring by the GSEs, as well as less mortgage market refinance activity given continued higher interest rates,” the report stated.
According to the data, there was a “large spike in usage related to mortgage portfolio analyses” by the GSEs in 2023, which did not recur in 2024. The 2023 analysis resulted in VantageScore being accepted by government agencies such as the U.S. Department of Veterans Affairs and the Federal Home Loan Banks of New York, Chicago, Dallas, Cincinnati and San Francisco.

The use of VantageScore comes as the mortgage industry prepares for major changes.

Last year, the Federal Housing Finance Agency (FHFA) announced that it would transition away from exclusive use of the current tri-merge credit reporting system and allow lenders to use a bi-merge model by the fourth quarter of 2025. 

At that time, Fannie Mae and Freddie Mac will purchase loans based on the FICO 10T and VantageScore 4.0 credit models, replacing the Classic FICO score system that has been in use for decades. 

Last summer, in a step to ease the transition to the new credit reporting requirements, the FHFA released VantageScore 4.0 historic credit data.

Overall, VantageScore credit score usage increased by 55% year over year to a record 41.7 billion credit scores for the full year of 2024. Silvio Tavares, the company’s president and CEO, said in a statement that it had “record-breaking growth and the highest overall credit score volume” in 2024.