FICO's new pricing program met with cautious optimism

Fair Isaac Corp. is rolling out a new program that lets mortgage resellers bypass the three major credit bureaus Equifax, Experian and Transunion and deliver its FICO credit scores directly to lenders, a shift the company says will bring down costs. The announcement drew cautious optimism from industry trade groups.

The move avoids any additional markups the three agencies tacked on and will "drive price transparency and immediate cost savings" to the mortgage lenders, brokers and others who need FICO's score in underwriting, Fair Isaac said. 

"Today marks a turning point in how credit scores are delivered and priced across the mortgage industry," said FICO CEO Will Lansing in a press release. "This…puts pricing model choice in the hands of those who use FICO scores to drive mortgage decisions." 

The direct license program will be available to both nonbank lenders and originators at depository institutions, including banks and credit unions, the company said. 

Home lenders have made no secret of their disdain for FICO's pricing in the past, frustrated by what they perceived as the high cost and the need to repay for the same borrower score multiple times in one loan transaction. They also criticized the expense of obtaining credit scores for consumers, who ultimately might not take out a loan with their company. Some critics called FICO's fee system "price gouging." 

The new program model will price a FICO score at a base $4.95. A $33 per borrower per score charge will apply if a FICO-scored loan is closed and avoids reissuance charges lenders previously paid when scores were also sent to mortgage insurers, government-sponsored enterprises and for other purposes. 

Lenders may also choose to continue using the current per-score pricing model, which comes out to an average of $10 for each issuance when obtained through a reseller and reflects no change from current levels, FICO said. 

The wholesale price of the FICO score for mortgage transactions increased by over 40% between 2024 and 2025, from $3.50 to the current level of $4.95, before credit bureaus added a markup. Prior to 2024, FICO sold its scores in a tiered pricing system. 

A salvo in the FICO-Vantagescore dispute?

FICO's announcement arrives amid its public feud with rival Vantagescore, following the Federal Housing Finance Agency's decision this summer to approve the use of the latter's credit scores for loan submissions to Fannie Mae and Freddie Mac. U.S. Mortgage Insurers later followed suit, emphasizing its commitment to work with FHFA to implement the Vantagescore 4.0 model.

The FICO Classic score had long been the sole approved system within conventional mortgage lending, with some accusing it of using monopoly pricing power. 

Vantagescore is co-owned by the three credit bureaus that now stand to miss out on the pipeline of revenue that came with including the FICO score in their reports. 

In response to FICO's announcement, the Consumer Data Industry Association, a trade group representing the national credit bureaus, issued its own statement that countered claims made about the new program.

"While the direct license program announced by FICO is positioned as a cost-cutting measure, it is simply not true. In reality, it is another price increase by FICO. With this announcement, FICO has at least doubled its publicly disclosed prices year-over-year while introducing operational costs and risk to resellers and lenders," CDIA said.

"This new pricing scheme validates the need for a competitive mortgage scoring market."

Transunion also issued its own statement Friday, similarly saying FICO's changes offered little in savings and pointed out how the full effect of the $33 fee might look like.

"TransUnion is disappointed to see FICO more than doubling its pricing at the expense of consumers. They have also introduced a new $99 penalty fee on each homebuyer ($198 for each couple co-purchasing a home)," the statement said.

"Importantly, while FICO characterizes their changes as 'eliminating reliance on the three nationwide credit bureaus,' it is, of course, the credit bureaus that provide the vital data upon which FICO scores are calculated. Without credit data, there can be no FICO score."

The mortgage industry reacts

Lender trade groups cautiously welcomed the FICO announcement, pointing to the possibility of cost savings, with the Mortgage Bankers Association saying it would enhance transparency and deliver lenders more options.  

"MBA has led the industry in calling for fixes to the anticompetitive market and increasing costs that lenders and consumers pay for required tri-merge credit reports and other credit reporting products," said President and CEO Bob Broeksmit, in a press release. 

"While it remains to be seen if this will result in materially lower costs, MBA will monitor the implementation of this new program while continuing to call for reforms that support a better credit reporting system," he added.

The Community Home Lenders of America responded in a similar tone, while also throwing barbs at FICO and voicing support for its rival. 

"CHLA welcomes steps like this direct licensing pricing, to create more options for consumers and lenders — so this appears to be a good first step in addressing our longstanding criticisms about FICO's monopolistic pricing and practices," the group said in a statement. 

"However, in the long run, CHLA continues to believe that more options are needed. Our lenders are eager to have a second choice with the VantageScore option, and we commend FHFA Director Pulte for his prior comments that even two providers are not enough." 

CHLA also expressed concern that "Fair Isaac might ultimately squeeze out Vantagescore and the credit bureau model altogether," if there were only two options available. 

FICO's late Wednesday announcement led to a significant spike in its stock to begin Thursday morning. After closing at a price of $1,512.71 the previous day, FICO value leaped 17% at opening bell on Thursday to $1,769.86