Fair Isaac Corp. is rolling out a new program that lets mortgage resellers bypass the three main credit score bureaus Equifax, Experian and Transunion and ship its FICO credit score scores on to lenders, a shift the corporate says will deliver down prices. The announcement drew cautious optimism from trade commerce teams.
The transfer avoids any further markups the three businesses tacked on and can “drive value transparency and quick price financial savings” to the mortgage lenders, brokers and others who want FICO’s rating in underwriting, Fair Isaac mentioned.
“Today marks a turning level in how credit score scores are delivered and priced throughout the mortgage trade,” mentioned FICO CEO Will Lansing in a press launch. “This…places pricing mannequin alternative within the fingers of those that use FICO scores to drive mortgage selections.”
The direct license program will probably be out there to each nonbank lenders and originators at depository establishments, together with banks and credit score unions, the corporate mentioned.
Home lenders have made no secret of their disdain for FICO’s pricing prior to now, pissed off by what they perceived because the excessive price and the necessity to repay for a similar borrower rating a number of instances in a single mortgage transaction. They additionally criticized the expense of acquiring credit score scores for customers, who finally may not take out a mortgage with their firm. Some critics referred to as FICO’s payment system “value gouging.”
The new program mannequin will value a FICO rating at a base $4.95. A $33 per borrower per rating cost will apply if a FICO-scored mortgage is closed and avoids reissuance fees lenders beforehand paid when scores have been additionally despatched to mortgage insurers, government-sponsored enterprises and for different functions.
Lenders may additionally select to proceed utilizing the present per-score pricing mannequin, which comes out to a median of $10 for every issuance when obtained by means of a reseller and displays no change from present ranges, FICO mentioned.
The wholesale value of the FICO rating for mortgage transactions elevated by over 40% between 2024 and 2025, from $3.50 to the present stage of $4.95, earlier than credit score bureaus added a markup. Prior to 2024, FICO offered its scores in a tiered pricing system.
A salvo within the FICO-Vantagescore dispute?
FICO’s announcement arrives amid its public feud with rival Vantagescore, following the Federal Housing Finance Agency’s choice this summer time to approve using the latter’s credit score scores for mortgage submissions to Fannie Mae and Freddie Mac. U.S. Mortgage Insurers later adopted go well with, emphasizing its dedication to work with FHFA to implement the Vantagescore 4.0 mannequin.
The FICO Classic rating had lengthy been the only accredited system inside typical mortgage lending, with some accusing it of utilizing monopoly pricing energy.
Vantagescore is co-owned by the three credit score bureaus that now stand to overlook out on the pipeline of income that got here with together with the FICO rating of their studies.
The mortgage trade reacts
Trade teams cautiously welcomed the FICO announcement, pointing to the potential for price financial savings, with the Mortgage Bankers Association saying it will improve transparency and ship lenders extra choices.
“MBA has led the trade in calling for fixes to the anticompetitive market and rising prices that lenders and customers pay for required tri-merge credit score studies and different credit score reporting merchandise,” mentioned President and CEO Bob Broeksmit, in a press launch.
“While it stays to be seen if this can end in materially decrease prices, MBA will monitor the implementation of this new program whereas persevering with to name for reforms that assist a greater credit score reporting system,” he added.
The Community Home Lenders of America responded in an analogous tone, whereas additionally throwing barbs at FICO and voicing assist for its rival.
“CHLA welcomes steps like this direct licensing pricing, to create extra choices for customers and lenders — so this seems to be a very good first step in addressing our longstanding criticisms about FICO’s monopolistic pricing and practices,” the group mentioned in an announcement.
“However, in the long term, CHLA continues to consider that extra choices are wanted. Our lenders are desperate to have a second alternative with the VantageScore choice, and we commend FHFA Director Pulte for his prior feedback that even two suppliers will not be sufficient.”
CHLA additionally expressed concern that “Fair Isaac would possibly finally squeeze out Vantagescore and the credit score bureau mannequin altogether,” if there have been solely two choices out there.
FICO’s late Wednesday announcement led to a major spike in its inventory to start Thursday morning. After closing at a value of $1,512.71 the day past, FICO worth leaped 17% at opening bell on Thursday to $1,769.86
