Mortgage lenders are rethinking credit scores in 2026. Here's why new credit models could bring relief to homebuyers who were shut out in the past

As the mortgage industry heads into 2026, that rulebook is starting to change. Lenders and regulators are moving away from relying on a single credit score and toward a new type of credit score that takes a broader look at how borrowers manage their money over time.

The change won’t make mortgages easier to get overnight and won’t guarantee approvals for riskier borrowers. But it could open the door for would-be buyers who have been paying their bills on time, paying down debt and improving their finances without seeing their traditional credit score change.

Here’s what’s driving the change, how the new scoring models work, and what it means for homebuyers.

Why mortgage lenders are rethinking credit scores

More than half of U.S. mortgages are backed by Fannie Mae and Freddie Mac, the two government-sponsored enterprises overseen by the Federal Housing Finance Agency (FHFA). Together, they set the rules for what are known as conforming mortgages, which are the standard home loans used by millions of buyers each year.

In November 2025, Fannie Mae removed its long-standing minimum credit score requirement from its Selling Guide. Instead of linking eligibility to a single cutoff, lenders are now encouraged to assess borrowers by using a wider mix of factors, including cash reserves, debt levels, loan purpose and property characteristics.

This move highlights a push across the housing industry to modernize how credit is evaluated. According to FHFA, consumers like renters and younger borrowers can show their financial responsibility in ways that wouldn’t typically be captured by traditional scoring systems.

With this change, mortgage lenders are beginning to test newer credit scoring models such as FICO Score 10T and VantageScore 4.0 (2). Unlike traditional scores, these models rely on “trended data,” which looks at how borrowers manage credit month after month. This could include whether balances are shrinking, payments are made consistently, and if debt is moving in the right direction.

In some cases, the models can also incorporate alternative credit data, such as rent, utility and phone payments. These are expenses that many households pay reliably, but haven’t historically counted toward mortgage decisions.

FICO estimates its newer model could lead to up to 5% more mortgage approvals, especially among first-time buyers, renters, young adults and borrowers with thinner or improving credit profiles.

But regulators and lenders are quick to draw a line. Income verification, debt-to-income limits and down payment requirements are factors that will still remain firmly in place.

"Our underwriting standards are the same," FHFA director William J. Pulte shared on X. "As a process matter, to ensure two scores can be used and not just one, we eliminated [the] requirement for FICO in the infamous 'guide'. Big deal for consumers. Small or nothing deal for underwriting."

What this means for homebuyers

Despite the changes underway, the mortgage system isn’t flipping a switch overnight.

Lenders still get to decide which credit models they use, and many continue to rely on traditional FICO scores, especially when it comes to standard conforming mortgages (3). While more than 40 lenders had adopted FICO Score 10T as of early 2026, most are using it for non-conforming products like home equity lines of credit, not everyday home purchase loans (1).

If you’re a prospective homebuyer, here are some practical takeaways: