Could Rental Payments Finally Help You Qualify for a Mortgage?

Insights/Atwood Group Real Estate, Brokered with Realty One Group

A major change to mortgage lending could help millions of Americans qualify for a home loan for the first time. Fannie Mae and Freddie Mac are now allowing lenders to use newer credit scoring models that include on-time rent payments and utility history. For buyers who have been financially responsible but struggled with traditional credit scoring, this could be a very big deal.

A Big Credit Score Change Could Open the Door to Homeownership for Millions

For years, many Americans have felt frustrated by the mortgage approval process.

They paid rent on time every month.
They paid utilities consistently.
They worked hard and managed their money responsibly.

But because they did not have enough traditional credit history, they were often shut out of buying a home.

That may finally be starting to change.

Fannie Mae and Freddie Mac recently finalized a rule change that allows lenders to use newer credit scoring models that consider rental payment history when evaluating mortgage applications.

This is a major shift in how mortgage creditworthiness is measured.

According to VantageScore, this update could help approximately 7.7 million Americans potentially raise their credit score above a 620 threshold, which is commonly needed for many traditional mortgage programs.

For many renters, especially younger buyers, freelancers, self-employed individuals, gig workers, and immigrants, this could create opportunities that simply did not exist before.

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Why This Matters

Traditional credit scoring systems have long focused heavily on things like:

• Credit cards

• Auto loans

• Student loans

• Mortgage history

The problem is that many financially responsible people either avoid debt or simply have not built enough traditional credit accounts to generate a strong score.

Meanwhile, rent is often a person's largest monthly expense.

Ironically, missing rent payments could hurt your credit, but consistently paying rent on time often did little or nothing to help it.

That disconnect frustrated many housing professionals and consumers alike.

This new direction attempts to modernize the system by recognizing real-world payment behavior.

What Exactly Changed?

Government-backed mortgage giants Fannie Mae and Freddie Mac announced they would expand the use of newer credit score models, including VantageScore and FICO 10T.

These updated scoring systems can factor in:

• On-time rental payments

• Utility payment history

• Trended financial behavior over time

This gives lenders a broader picture of how someone manages their money.

The goal is not to lower lending standards.

The goal is to better identify people who are already financially responsible but were previously overlooked by outdated scoring systems.

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Who Could Benefit Most?

This change may especially help:

• First-time home buyers

• Younger buyers with limited credit history

• Self-employed individuals

• Gig economy workers

• Freelancers

• Immigrants building credit in the U.S.

• People who avoid carrying debt

Many of these buyers have stable income and strong payment habits but struggle with "thin" credit files.

In other words, they may already be financially qualified in real life, just not under the old scoring models.

Could This Increase Mortgage Approvals?

Potentially, yes.

If lenders can now recognize years of positive rent history, some buyers who previously fell short on credit score requirements may now qualify.

That does not mean everyone will automatically be approved.

Lenders still review:

• Income

• Debt-to-income ratios

• Employment stability

• Assets

• Down payment funds

But this update may help more borrowers get through the front door of the approval process.

What Buyers Should Do Right Now

If you are hoping to buy a home in the future, this is a good reminder to:

• Pay rent on time every month

• Ask your property management company if they report rental payments

• Consider rent reporting services if your landlord does not report

• Keep utility accounts current

• Monitor your credit regularly

• Avoid late payments on any accounts

Small financial habits matter more than many people realize.

Final Thoughts

This change may not instantly transform the housing market overnight, but it represents an important shift toward recognizing real financial responsibility.

For years, many renters felt invisible in the mortgage system despite consistently paying thousands of dollars in housing costs every year.

Now, those payments may finally start working in their favor.

And for millions of Americans hoping to buy a home someday, that could make all the difference.

Credit

This blog post was inspired by reporting from Realtor.com and article author Tristan Navera published May 8, 2026._)

CONTACT:

Debbie Atwood - Realtor

Realty One Group/ Atwood group Real Estate

📞 425-750-4970

✉️ [email protected]

🌐 www.atwoodgrouprealestate.com

FAQ's

Will paying rent on time improve my credit score now?

Possibly. Some newer scoring models like VantageScore and FICO 10T can include rental payment history if it is reported to the credit bureaus.

Does every landlord report rental payments?

No. Many landlords and property management companies still do not report rent payments automatically.

What credit score is typically needed to buy a home?

Many conventional mortgage programs look for a minimum score around 620, although requirements vary by loan type and lender.

Will this make mortgages easier to get?

Not necessarily easier, but it may help lenders better evaluate borrowers who have strong financial habits but limited traditional credit history.

Can utility payments help my credit too?

In some cases, yes. Certain newer credit scoring models may consider utility payment history when reported to the credit bureaus.

Does this change apply to FHA or VA loans?

This announcement specifically relates to Fannie Mae and Freddie Mac conventional loan underwriting. FHA and VA guidelines may differ.