What Is VantageScore 4.0?
At LBC Mortgage, we understand how much your credit score impacts your ability to buy a home. With the introduction of VantageScore 4.0, many borrowers in California now have new opportunities to qualify for a mortgage—even if they were previously denied. This new scoring model brings more flexibility and fairness to credit evaluation, especially for renters and people with limited credit histories.
VantageScore 4.0 is a credit scoring model developed by the three major credit bureaus—Equifax, Experian, and TransUnion. It updates previous versions by incorporating new forms of data, including rental, utility, and telecom payment histories. These are types of data that were not traditionally factored into a borrower’s credit score but are now given weight in the scoring formula.
This version also uses machine learning to better predict a borrower’s ability to repay debt. That means the score is more accurate for people with non-traditional credit profiles, which includes many Californians who rely on alternative forms of payment history.
How VantageScore 4.0 Changes the Mortgage Landscape
Federal Approval and Market Shift
In 2022, the Federal Housing Finance Agency (FHFA) approved the use of VantageScore 4.0 for mortgages backed by Fannie Mae and Freddie Mac. As of July 2025, lenders can use this model in addition to or instead of the traditional Classic FICO score when originating conforming loans. Some lenders have already begun integrating VantageScore 4.0 into their underwriting processes.
This approval ends the decades-long dominance of FICO scores in mortgage lending. Now, lenders can use whichever scoring model gives the borrower the best chance to qualify, which is a big win for first-time buyers and underserved communities.
California-Specific Benefits
California is home to millions of renters, gig workers, immigrants, and others with thin or limited credit files. Many of these individuals pay rent and utility bills on time but do not have traditional credit lines like auto loans or credit cards. VantageScore 4.0 gives these borrowers credit for responsible financial behavior that previously went unnoticed.
This model also reduces the number of people who are classified as “unscorable.” According to VantageScore, more than 33 million Americans now have scores who didn’t before, and over 10 million of them have scores above 620—typically the minimum needed for mortgage qualification.
In a high-cost housing market like California, this means more people can enter the housing market with confidence.
Why Renters and Young Buyers Benefit Most
Inclusion of Alternative Data
The most significant difference with VantageScore 4.0 is its use of alternative data. Renters who consistently pay on time can now see those payments reflected in their credit scores. Similarly, utility bills and cell phone payments are also considered, offering more chances to build credit without relying on traditional debt.
For young people, especially college students or recent graduates, this model opens up new doors. Many are just starting their financial lives and haven’t yet established long credit histories. VantageScore 4.0 gives them a chance to qualify sooner, and often at better rates.
More Accurate Risk Assessment
Traditional models often penalize short credit histories, even if all accounts are in good standing. VantageScore 4.0 looks at patterns and consistency rather than just the length of the credit file. This results in more accurate risk assessments, especially for people who have responsibly managed fewer accounts over a shorter time.
What This Means for California Homebuyers
For California buyers, especially those in Los Angeles, San Diego, or the Bay Area, the cost of entry into the housing market is already high. If your credit score is below the required threshold, even slightly, you might be shut out entirely. VantageScore 4.0 can help bridge that gap by adding creditworthy behaviors that FICO often ignores.
This is particularly helpful for immigrant communities, self-employed individuals, and lower-income households who may have steady payment histories but not enough “traditional” credit to qualify.
How LBC Mortgage Helps You Navigate These Changes
At LBC Mortgage, we don’t rely on one-size-fits-all solutions. We review each borrower’s full credit profile and work with lenders who support both FICO and VantageScore 4.0. This allows us to identify the scoring model that presents your profile in the best light.
We also guide our clients through the process of reporting alternative credit data. If you’ve been paying rent or utilities on time, we help make sure those payments are documented in your credit file. Many consumers are unaware that these payments can now be used to boost their scores, and we’re here to help make that happen.
Our mortgage specialists stay up to date with all regulatory changes and lender policies. We ensure compliance while also helping you qualify for the best loan products available.
How to Prepare for a Mortgage With VantageScore 4.0
Check Your Credit Reports
Your first step should be reviewing your credit reports from all three bureaus. Make sure all payment histories are accurate and up to date. If you’re missing rental or utility payments, consider using services that report these to the bureaus.
Aim for a Score of 620 or Higher
While each lender sets its own criteria, a score of 620 is typically the minimum for many conventional loans. With VantageScore 4.0, you may be closer to that number than you think—especially if you’ve been financially responsible without using credit cards or loans.
Work With a Broker That Understands the New Rules
Not all mortgage brokers are ready for VantageScore 4.0. At LBC Mortgage, we are already helping clients qualify under this model. We take the time to compare your options and select the best path forward.
The Long-Term Outlook
The FHFA plans to require full adoption of VantageScore 4.0 by the end of 2025. That means the entire mortgage industry will eventually rely on this new scoring model, alongside updated credit report requirements. Lenders will need to pull reports from all three bureaus and compare both scoring models.
While these changes may take time to implement, the early adopters will have a competitive advantage—both lenders and borrowers. At LBC Mortgage, we’re already preparing for this shift so that our clients are not left behind.
Take the Next Step With LBC Mortgage
VantageScore 4.0 is more than just a new credit score—it’s a turning point in mortgage access. If you’re a renter, a new borrower, or someone who’s struggled to qualify, this scoring model could change everything.
At LBC Mortgage, we know how to put this system to work for you. Contact us today to find out how we can help you secure a mortgage that fits your financial goals. We’ll walk you through every step and give you the edge you need in California’s fast-moving housing market.
