Source: Wall Street Journal

Date Published: 7.15.2025

Link: A Risky Race to the Bottom on Housing Credit

FICO’s CEO Will Lansing pushed back against the idea of letting mortgage lenders choose between different credit scoring models like FICO and VantageScore. He argues that VantageScore, which scores people with very little credit history, is too relaxed and opens the door for riskier lending. While it may seem more “inclusive,” it does so by lowering the bar. FICO’s newer model, 10T, includes rental and utility data like VantageScore does, but without cutting standards—and it actually reduces defaults while qualifying more borrowers. Lansing warns that if the FHFA allows lenders to pick the scoring model, it’ll spark a race to the bottom where credit bureaus compete by watering down standards, which ultimately pushes risk onto taxpayers. He basically says we’ve seen this movie before in 2008, and it didn’t end well.