Fitch Seeks Input on Alternative Credit Scores
The rating agency is asking RMBS buyers how to assess securities backed by loans scored with alternative credit models.
Updated on Nov. 6, 2026 in Residential
Fitch is seeking feedback on how to assign ratings to residential mortgage-backed securities when alternative credit scores are used to originate loans. Government-sponsored enterprises have priced loans scored with VantageScore 4.0 equitably with FICO classic, and the number of originators using the newly allowable score has grown notably.
Why it matters
Alternative credit scores are gaining ground in the mortgage market, and how rating agencies treat them affects how securities backed by those loans are valued and bought. Fitch's request for input signals that the framework for these ratings is still being shaped.
Fitch allows up to 10% of a securitized loan pool to lack FICO classic scores, and feedback on its proposed criteria is due November 16. The final treatment of alternative scores in ratings has not been set.
The players
Fitch Ratings
Fitch Ratings is a major credit rating agency whose residential mortgage-backed securities division is setting criteria for alternative credit scores.
Morningstar DBRS
Morningstar DBRS is a credit rating agency that announced in April a process for converting VantageScore 4.0 into FICO score equivalents.
The details
Fitch is requesting feedback on three ways alternative credit scores may be used: as a substitute for FICO classic, as a complement to it, and where lenders can choose among scores from fewer than all three credit bureaus. The agency proposes comparing default rates, defined as loans 90 or more days past due, to evaluate alternative scores as a complement to FICO classic.
Timeline
November 16: Deadline for feedback on the alternative credit score rating criteria.
April: Morningstar DBRS announced a process for converting VantageScore 4.0 into FICO score equivalents.
Market Landscape
The GSEs' equitable pricing of loans scored with VantageScore 4.0 and FICO classic has opened the door for alternative scores to enter mortgage securitization. Fitch's request for feedback extends that shift from loan origination into how the resulting securities are rated.
Borrowers whose credit is scored with alternative models may find those scores treated differently in securitization, depending on how Fitch and other agencies settle their criteria. Homebuyers should ask lenders which credit score is being used on their mortgage application.
The takeaway
Credit scoring rules for mortgages are being rewritten in real time, and the criteria rating agencies adopt will shape which loans reach the securities market. Borrowers and buyers should track these changes as the feedback period closes.
What happens next
Fitch will accept feedback on its proposed criteria through November 16.
Further reading
For more on how mortgage financing is changing, see Residential real estate coverage.
Source note: This article includes information reported by National Mortgage News.
