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The Credit Model Your Lender Chooses

Two lenders. Same borrower, same credit report, same week. One will lend to 80% of the home's value on the newer credit scoring model. The other goes to 97%. Nothing about the buyer changed — only the rulebook did.

Recorded August 27, 2026 · 2 min 18 sec

Recorded August 27, 2026. Figures and market conditions reflect information available on that date and may have changed since. Independent research by Todd Hanley; not the views of United Direct Lending.

Sources & research

1 in 3 Homebuyers Say They Will Drop Their Mortgage Lender Over This Issue
Realtor.com · August 25, 2026

Experian says 1 in 3 prospective homebuyers would walk away from a mortgage lender using only older credit-scoring models that exclude on-time rent and utility-payment history. Mortgage industry leaders at MISMO urged adoption of newer models such as FICO 10T and VantageScore 4.0, arguing they better reflect modern consumer finances, gig-economy income patterns, and thin-file borrowers without necessarily increasing risk. The article also notes AI’s growing role in mortgage and credit workflows, including data collation, borrower preparation, and GSE/servicer operational use with security concerns.

Research sources

82 sources were consulted in Todd Hanley’s independent research for this video. The 5 below were cited by two or more separate research passes; every link was checked when this page was built.

Government & primary data (4)
News & analysis (1)
Also consulted (77)

Full script

Read the full script

Two lenders, the same borrower, the same credit report, the same week. One will lend to 80% of the home's value. The other goes to 97%.

Nothing about that buyer changed. Only the rulebook did.

On a conventional mortgage, the credit scoring model used on your file is now a choice. Fannie Mae and Freddie Mac approved a second model, and the lender decides which one reads your report.

Same three bureaus, same report. One model counts your on-time rent and utility payments. The legacy one acts like those years never happened.

Experian estimates as many as 7.7 million people could see a better score under modernized reporting. In a survey of 2,000 prospective buyers, 1 in 3 said they would walk away from a lender still using only the old model.

Susan Allen at Experian Housing said it plainly. A consumer with a thin traditional credit file is not necessarily a consumer with a thin financial life.

I ran one buyer's file both ways in the same week. Same debts, same report, roughly a $470,000 loan. On the newer model it priced better, and his payment moved with it.

I didn't raise his credit score. I didn't have to. The score never changed. The model reading it did. That is one file, not a promise about yours.

And this is where it gets sharp. Two wholesale lenders wrote completely different rules around the same model. One caps it at 80% of value, primary residence only. The other, as of May 13, takes it to 97%.

Same borrower, same score. At one shop the model is eligible and it stretches. At the other it stops early, or it does not fit at all.

So if your file lands at the wrong shop, you do not hear try a different door. You hear no, and you walk out believing the problem was your credit.

The problem was the door. Reading which model applies where, and how far it stretches on which loan, is a judgment call a broker makes and a retail bank cannot.

I'm Todd Hanley, Senior Loan Officer with United Direct Lending and Mortgage Broker. If you'd like a transparent, data-driven process that removes the guesswork, I'd love to speak with you today. Thanks for watching.

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Independent research and commentary. The research, data analysis, and opinions in this video and on this page are Todd Hanley's own and do not represent the views of United Direct Lending. They are not lending advice and are not tied to any loan program, product, or lending decision.

Educational content only. Not a commitment to lend, a rate quote, or an offer of credit. Programs, rates, fees, and guidelines are subject to change without notice; not all borrowers will qualify. Todd Hanley, RICP® | NMLS #1013665 | United Direct Lending NMLS #1749719 | Equal Housing Opportunity.

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Date & Time
Duration30 minutes
WithTodd Hanley, RICP®