Ben Okonkwo: The thing that keeps coming back to me — there's a person somewhere who's been paying rent every month, on time, for years. And under the old framework, Fannie Mae and Freddie Mac couldn't see that. Their model didn't count it. So to Classic FICO, that person barely existed.
Jonathan Ingles: Hm. And Classic FICO is — for people who don't live in this world — that's the model? The one model?
Ben Okonkwo: The one model. Here's the plain version: a credit score is just a prediction about whether you'll repay a loan. Classic FICO built that prediction a specific way. And for decades — decades — Fannie Mae and Freddie Mac, the two institutions that buy most American mortgages, only accepted that one prediction. No alternatives. It's like if every job application in the country had to go through one recruitment firm.
Jonathan Ingles: That's a monopoly. That's just — that's a monopoly.
Ben Okonkwo: A near-monopoly, yeah. And on April 22nd, 2026 — William Pulte at FHFA and Scott Turner at HUD announced that Fannie Mae, Freddie Mac, and FHA would now accept mortgages assessed using VantageScore 4.0. Which is the first time in decades that a different model gets approved for government-backed mortgage purchasing.
Jonathan Ingles: First time in decades. And that's the moment we're starting from.
Jonathan Ingles: Except — look — it didn't start in 2026. Congress passed the Credit Score Competition Act in 2018. Section 310 of the Economic Growth, Regulatory Relief and Consumer Protection Act. That's not a suggestion. That's a mandate. FHFA, you will validate alternative models. And then... nothing. Eight years.
Ben Okonkwo: Eight years of — I mean, they did eventually issue 12 CFR Part 1254, the Validation and Approval of Credit Score Models Rule, to actually operationalize the thing. But you're right that the clock was running.
Jonathan Ingles: October 24th, 2022. FHFA approves both FICO 10T and VantageScore 4.0 for future GSE use. Future. And then another four years pass before April 2026. Classic FICO holding its monopoly the entire window.
Ben Okonkwo: That's — yeah. That shape is suspicious.
Jonathan Ingles: Frankly, Fair Isaac didn't need to kill the law. They just needed implementation to never arrive. And it worked. Now — here's where it actually inverts. VantageScore 4.0. Who owns that?
Ben Okonkwo: VantageScore Solutions is a joint venture of the three major credit bureaus. Equifax, Experian, TransUnion. The same entities selling the underlying credit data to lenders... own the competing scoring model.
Ben Okonkwo: And that's — I mean, that's the structural question nobody's really sitting with. Because the access framing sounds clean. VantageScore 4.0 incorporates trended credit data — longitudinal payment behavior, not just a snapshot — and in some cases rent and utility payment history. Which is genuinely different from Classic FICO. For that renter I mentioned, paying on time for three years, that history now potentially exists in the model.
Jonathan Ingles: Right, but — verified how?
Ben Okonkwo: That's exactly it. The research on actual approval rates and default performance under these models in the mortgage market — it's empirically unverified at scale. We have validation studies. Lab conditions. Not real underwriting data from real stressed borrowers.
Jonathan Ingles: And we're deploying it at 6.7% rates. Where every marginal borrower is already stretched.
Ben Okonkwo: Yeah. And here's what I think gets lost — FICO 10T also incorporates trended data, and it's approved for GSE use, coming in a later phase after VantageScore 4.0. So the trended-data mechanism isn't unique to one model. But the question — actually, the question that matters — is whether the outputs are distorted by the bureau ownership structure. Equifax, Experian, TransUnion owning the model that scores the data they sell. That's not settled.
Jonathan Ingles: Fannie Mae and Freddie Mac are holding that risk if it's not.
Ben Okonkwo: Them, FHA, taxpayers. This is a policy bet placed before the evidence is in. The GSEs moved to an interim phase — lenders can use Classic FICO or VantageScore 4.0 right now, with a full framework to follow. Approvals expand visibly in months. Default data arrives in 18, 24 months. That asymmetry is the whole story.
Jonathan Ingles: The approvals show up in six months. You can count them. HUD puts out a number, FHFA puts out a number, William Pulte gives a speech. Homeownership expanded. And then — I mean, the defaults. Those land in 2027, 2028, during a different news cycle, under a different framing. It's not a credit score story anymore. It's a servicer story, a GSE loss story. Nobody traces it back to a model choice made in April 2026.
Ben Okonkwo: And neither HUD nor FHFA has a public commitment to track default outcomes by which model scored the loan. That's — that's not an accident, exactly, but it means the measurement architecture to answer the question just... isn't being built.
Jonathan Ingles: Yeah. The gap between those two moments is where the real story lives.
