After a 25-year monopoly of credit scoring home loans for mortgage giants Fannie Mae and Freddie Mac, FICO finally has some competition.

VantageScore, owned by the three major credit bureaus Experian, Equifax and Transunion, will be another choice for mortgage shoppers and mortgage loan originators in respect to mortgage approvals and loan pricing. The program, effective Nov. 17, must be fully implemented by Fan, Fred and mortgage lenders.

The biggest winners in this new competition will be folks with either no credit or little credit, also known as “a thin file.”

VantageScore provides a credit score with as little as one account that is just 1 month old. For example, such an account can be a secured or unsecured credit card, rent or utility payment. This is a unicorn, especially for underserved borrowers who want to become first-time buyers.

“VantageScore can open a lot of doors for the underserved market,” said Mindy Leisure, director of credit education at Advantage Credit. “(It) can generate a credit score with just one month of reporting while FICO takes six months or longer.”

VantageScore ignores all paid collections (not just medical) and unpaid medical collections. FICO only ignores unpaid medical collections under $500 whereas paid medical collections are removed from scoring. Unpaid non-medical collections are factored into both scoring models, all according to Leisure.

So, how do you create credit to get scored by VantageScore?

There are several ways. The easiest way is to go to your bank or credit union and ask for a credit card. You might be asked for income information, etc.

If you cannot get an unsecured credit card, then apply for a secured credit card. That means you will be putting say $500 in a liened account, meaning that money is frozen collateral in case you don’t pay the credit card bills. After so many months of on-time payments, you should be able to remove the $500 lien.

Leisure recommends OpenSky at openskycc.com for a secured credit card because it reports to the credit bureaus as soon as you use the card (rather than waiting 30 days or so for the billing cycle).

Ask your landlord if he or she reports tenants to credit bureaus. Most smaller landlords do not file these report.

To have rent reported, the tenant (and sometimes the landlord) will have to enroll in a rent reporting service. Rent Reporters, Self, Kharma and Boom offer this service. Some companies may charge a fee to the tenant or the landlord or both to utilize their services. Some do not report to all three bureaus, according to Leisure.

Linking utility bills to a credit report is similar to rent reporting, according to Leisure. Self and Simpebills are two companies consumers can use to do so.

It’s not clear how soon VantageScore will be fully implemented with Fannie Mae and Freddie Mac.

Both FICO and VantageScore offer scoring ranges from 300-850.

FICO scores are broken down into five categories: poor (300-579), fair (580-669), good (670-739), very good (740-799) and exceptional (800-850).

VantageScore is broken down into four categories: subprime (300-600), near prime (601-660), prime (661-780) and superprime (781-850).

Both weigh payment history (FICO 35%, VantageScore 41%), credit utilization (FICO 30%, VantageScore 20%, length of credit history (FICO 15%, VantageScore 20%), new credit (FICO 10%, VantageScore 11%), credit mix (FICO 10%, VantageScore includes credit mix in credit utilization), Leisure told me.

Fannie and Freddie use a grid for a portion of the pricing. On one side its loan-to-value or how much down payment or equity (in the case of a refinance). On the other grid, it’s your lowest middle credit score. Neither Fannie, Freddie, nor their conservator and regulator Federal Housing Finance Agency, have yet to announce how they are going to rectify the different score weighting and categories.

Lenders may be able to pull both a FICO and a VantageScore with your tri-merged credit report, but they will only be able to submit one of them to the mortgage giants. Pick your poison.

It’s not yet known what a VantageScored tri-merged credit report is going to cost. To my knowledge, FICO scored, tri-merged credit reports run in the $80 range to $140, depending on which lender pulls your credit and what kind of deal they have worked out with the credit reseller.

Some lenders ask you to pay for the credit report upfront. Many lenders only charge the borrower if their loan closes. Some don’t charge at all. We can only hope that competition drives those prices down.

The 30-year fixed rate averaged 6.26%, 2 basis points higher than last week. The 15-year fixed rate averaged 5.54%, 4 basis pointshigher than last week.

The Mortgage Bankers Association reported a 5.2% mortgage application decrease compared to one week ago.

Bottom line: Assuming a borrower gets an average 30-year fixed rate on a conforming $806,500 loan, last year’s payment was $308 more than this week’s payment of $4,971.

What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.49%, a 15-year conventional at 5.25%, a 30-year conventional at 5.875%, a 15-year conventional high balance at 5.75% ($806,501 to $1,209,750 in LA and OC and $806,501 to $1,077,550 in San Diego), a 30-year-high balance conventional at 6.125% and a jumbo 30-year fixed at 6.125%.

Eye-catcher loan program of the week: A 30-year mortgage, fixed for the first five years at 5.5% with 30% down payment and 1 point cost.