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Mortgage lenders discuss AI and alternative data in new credit models
Panelists at MISMO’s Fall Summit said FICO 10T and VantageScore 4.0 are approved for mortgage use, and lenders must validate expanded data and AI within compliance and workflow constraints.
Mortgage lenders are weighing how to use AI, alternative data, and new credit scoring models as the mortgage industry moves toward a broader set of borrower information, according to HousingWire. At a Credit Super Session during the Mortgage Industry Standards Maintenance Organization, or MISMO, Fall Summit, executives from FICO, VantageScore, Experian, Equifax, and TransUnion discussed what comes next after credit score updates centered on FICO 10T and VantageScore 4.0. Panelists said both scoring models have been approved for mortgage market use and incorporate trended credit information that offers a longer view than classic point-in-time FICO.
While participants agreed that more data can improve credit decisions, they cautioned lenders to validate model performance and ensure AI and alternative data can be tested and integrated into existing workflows, regulatory obligations, and capital markets requirements. They also highlighted operational readiness and investor acceptance as factors that could affect how quickly lenders adopt new approaches.
VantageScore’s Anthony Hutchinson urged lenders to confirm their systems can accept both FICO 10T and VantageScore 4.0, noting the operational shift from decades of relying largely on a single dominant mortgage credit score model. Equifax’s Justin Demola said lenders likely need both models because different borrower profiles and lending stages may call for different approaches, with internal workflow design aimed at lowering origination costs, improving borrower qualification, and strengthening consumer communications.