topic FICO to start selling mortgage scores directly to resellers (lenders) in Credit in the News

FICO to start selling mortgage scores directly to resellers (lenders)

NoHardLimits — Thu, 02 Oct 2025 15:05:31 GMT

FICO announced plans to start selling mortgage scores directly to lenders to bypass the middleman role currently held by credit bureaus.

https://money.usnews.com/investing/news/articles/2025-10-02/shares-of-credit-bureaus-fall-as-fico-rolls-out-direct-mortgage-score-licensing

An excerpt:

"Fair Isaac Corp's shares surged in Thursday morning trading after the U.S. data analytics company said it would license its credit scores directly to mortgage resellers, raising concerns of margin pressure for major credit bureaus.

Shares of Experian, Equifax and TransUnion tumbled on fears that the move could curtail the intermediary role of the credit reporting companies.

FICO score, created by Fair Isaac, is a U.S. credit scoring system used by nearly 90% of lenders to evaluate a borrower's creditworthiness. The higher the number, the lower the risk of default.

Fair Isaac said direct access to FICO scores for lenders and mortgage resellers would increase competition and bring price transparency."

https://finance.yahoo.com/news/credit-bureaus-fall-sharply-fico-091807328.html

An excerpt:

“Today marks a turning point in how credit scores are delivered and priced across the mortgage industry,” said Will Lansing, CEO of FICO.

“This change eliminates unnecessary mark-ups on the FICO Score and puts pricing model choice in the hands of those who use FICO Scores to drive mortgage decisions.”

Under the program, FICO will charge $4.95 per score and add a $33 per borrower fee when a loan closes, replacing prior reissue charges. Alternatively, lenders can keep the traditional $10 per-score model through resellers.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

NoHardLimits — Thu, 02 Oct 2025 18:08:36 GMT

The Wall Street Journal is now reporting on this story.

https://www.wsj.com/personal-finance/credit/fico-stock-pricing-model-434ff3e7?mod=finance_lead_story

An excerpt:

"Until now, mortgage credit specialists known as tri-merge resellers had to purchase FICO scores through credit-reporting firms Experian, Equifax and TransUnion to provide lenders with a combined report drawing from all three. FICO’s new program streamlines that process by letting resellers buy scores straight from the company. The shift removes bureau markups that had pushed fees to about $10 a score." "Under the new structure, lenders can choose between a flat $10 fee or a performance-based model that charges $4.95 a score plus a $33 fee when a loan closes. FICO said the closing fee replaces reissue charges but didn’t disclose the prior amount."

[Edit to update paywalled link.]

Re: FICO to start selling mortgage scores directly to resellers (lenders)

Thomas_Thumb — Thu, 02 Oct 2025 16:50:29 GMT

This looks like a backlash to punish the CRAs for jointly developing VantageScore and pushing thru VS 4.0 for mortgage lending.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

JoeRockhead — Thu, 02 Oct 2025 17:14:52 GMT

@Thomas_Thumb wrote:
This looks like a backlash to punish the CRAs for jointly developing VantageScore and pushing thru VS 4.0 for mortgage lending.

It certainly appears to be a direct response in opposition to Vantage.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

cashorcharge — Thu, 02 Oct 2025 20:38:44 GMT

So if Mortgage Brokers are getting scores from CB's today...that should mean they are running SP's or HP's to get those scores to then use...but in the case of FICO, they will provide the scores to the mortgage brokers, skirting EX, TU and EQ...meaning you can shop for Mortgages and use scores from FICO so HP or SP for shopping would not be necessary?

Less HP's to shop for mortgages in the future? Not sure I'm correct here....??

Re: FICO to start selling mortgage scores directly to resellers (lenders)

Patient957 — Thu, 02 Oct 2025 21:05:31 GMT

FICO up 18% in today's trading on the NYSE.

TRU down almost 11% in the same session.

EFX down 8.5%.

So the market clearly approves of the move.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

Thomas_Thumb — Thu, 02 Oct 2025 21:33:25 GMT

Market barons always approve of monopolies. I guess it is time for the CRAs to retaliate and increase the fees charged to Fico many fold for the data they manage as inputs to Fico models. Then Fico will appropriate CRA data to set-up their own CRA infrastructure in an effort to establish a vertical monopoly.

As for what was mentioned above regarding elimination of credit seeking HPs, don't count on it. Big data has proven a correlation between credit seeking and risk.

If Fico circumvents HPs, lenders who make risk based decisions should migrate to VS 4.0.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

NoHardLimits — Fri, 03 Oct 2025 00:13:32 GMT

https://www.marketwatch.com/story/what-ficos-credit-score-shakeup-really-means-for-home-buyers-edae75c4?mod=real-estate-personal-finance

A few excerpts from the paywalled article:

"This could be good news for consumers, Chi Chi Wu, a staff attorney at the National Consumer Law Center, told MarketWatch, given the immense influence that credit bureaus have had over millions of consumers’ personal finances. At the very least, Wu said, it “can’t hurt.”"

"While it is still too early to tell if consumers will actually see lower costs, this cutting out of the middlemen is “a step in the right direction,” Bob Broeksmit, chief executive and president of the Mortgage Bankers Association, an industry trade group, said in a statement."

"People taking out a loan don’t directly pay FICO for their credit scores. Resellers and, subsequently, lenders pay for it, and they pass on those costs to borrowers in the form of fees — and those fees have been climbing. When lenders request credit scores, they have historically obtained it from the resellers, not from FICO directly. For its role in creating those scores, FICO collects a per-score royalty from a credit bureau. That royalty amount jumped from $0.60 in 2018 to $4.95 in 2024 — a 725% increase in six years."

"Matt Schulz, LendingTree’s chief consumer finance analyst, was less certain that consumers would see any benefit. “This looks like it is more about FICO and their clients in the mortgage business than it is about the average home buyer,” he said. “FICO is saying that it will save mortgage lenders and brokers money immediately, but whether that translates into any savings for the consumer is unclear.”"

Re: FICO to start selling mortgage scores directly to resellers (lenders)

FlaDude — Fri, 03 Oct 2025 13:47:44 GMT

@NoHardLimits wrote:
“FICO is saying that it will save mortgage lenders and brokers money immediately, but whether that translates into any savings for the consumer is unclear.”"

Considering the savings appears to be around $5 per score pull, even if this was passed to borrowers (and of course it won't be), who would notice or care about a $15 savings on a mortgage.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

NoHardLimits — Fri, 03 Oct 2025 16:59:36 GMT

@FlaDude wrote:
@NoHardLimits wrote:
“FICO is saying that it will save mortgage lenders and brokers money immediately, but whether that translates into any savings for the consumer is unclear.”"
Considering the savings appears to be around $5 per score pull, even if this was passed to borrowers (and of course it won't be), who would notice or care about a $15 savings on a mortgage.

I agree with you. This change is more about impacts to the mortgage and credit scoring industries, as well as the effects on credit bureau profits.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

FlaDude — Sat, 04 Oct 2025 02:10:32 GMT

@NoHardLimits wrote:
I agree with you. This change is more about impacts to the mortgage and credit scoring industries, as well as the effects on credit bureau profits.

Sorry if there was any confusion. I wasn't suggesting that you felt differently, just that it seems like a waste of space in the original article. I've read other articles about this and some of them raise the same question, which seems ridiculously insignificant in the context of all of the fees a mortgage has.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

NoHardLimits — Sat, 04 Oct 2025 15:01:12 GMT

@FlaDude wrote:
@NoHardLimits wrote:
I agree with you. This change is more about impacts to the mortgage and credit scoring industries, as well as the effects on credit bureau profits.
Sorry if there was any confusion. I wasn't suggesting that you felt differently, just that it seems like a waste of space in the original article. I've read other articles about this and some of them raise the same question, which seems ridiculously insignificant in the context of all of the fees a mortgage has.

No worries @FlaDude . I think I understood your original sentiment and just wanted to say that I felt the same way. While many of the news articles did focus on the business impacts for mortgage bankers and credit bureaus, some did feature quotes which seemed to indicate that this development could be good for consumers. Like you, I don't feel as though the change will significantly affect mortgage applicants financially unless the pricing causes lenders to favor one scoring source over the other. Depending upon which scores look better for each borrower, that could make a difference in quoted mortgage rates. If my FICO scores looked better than my VantageScores, I'd certainly want the lender to use FICO.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

Zoostation1 — Sun, 05 Oct 2025 20:36:00 GMT

@NoHardLimits I don't want any lender using VS 4.0 until I can readily obtain them from all 3 of the major CRAs as a consumer.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

NoHardLimits — Sun, 05 Oct 2025 21:54:49 GMT

@Zoostation1 wrote:
@NoHardLimits I don't want any lender using VS 4.0 until I can readily obtain them from all 3 of the major CRAs as a consumer.

Agreed @Zoostation1 , though consumers aren't really involved in the decision making process. I don't recall consumers rallying to have VantageScore 4 added as an option for mortgage credit scoring.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

NoHardLimits — Wed, 08 Oct 2025 16:59:45 GMT

Equifax has fired a return salvo. Per the Wall Street Journal:

https://www.wsj.com/personal-finance/credit/equifax-cuts-prices-after-fico-shakes-up-credit-score-market-9dc769aa?mod=pls_whats_news_us_business_f

Some excerpts from the paywalled article:

"Equifax said it’s offering cheaper mortgage score prices after Fair Issac unveiled a plan to sell its credit scores directly to mortgage lenders and resellers, cutting credit bureaus out of the deal. The data and technology company said Tuesday it will offer its VantageScore 4.0 mortgage credit scores for $4.50 through the end of 2027, less than half the price of the $10 score offered by FICO for 2026."

"Equifax Chief Executive Mark Begor said the company believes that the best way to drive change in the marketplace and lower costs for consumers is through open competition. “Equifax plays an essential role in the financial lives of consumers and the mortgage industry, and we take that responsibility very seriously—particularly in the most challenging mortgage and housing market in 20 years,” Begor said."

"Equifax will also offer free credit scores to all of its mortgage, automotive, card and consumer finance customers who purchase FICO scores for the remainder of 2025 and throughout 2026. The move aims to make VantageScore more easily accessible for lenders to evaluate, and show the value of the score’s inclusion of alternative data that is not included in traditional credit reports, the company said."

Re: FICO to start selling mortgage scores directly to resellers (lenders)

Pppoolboy — Mon, 13 Oct 2025 23:11:37 GMT

Fun to see them all fight.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

Realist — Wed, 15 Oct 2025 01:14:20 GMT

While these moves can have direct impact on the corporations affected on a more mass scale, the real cost to the individual is nearly null. As a lender, I would rather want to pull a full arsonel of data on an individual I intend to lend 100K to millions.

In a closing, there are thousands, and tens of thousands of dollars involved, and sometimes more. Why even skimp on a few dollars (from a lenders stand point - unless you've already found your acceptable certainty level).

Re: FICO to start selling mortgage scores directly to resellers (lenders)

DSTforlife — Fri, 17 Oct 2025 14:22:34 GMT

I'm still trying to understand how this impacts the consumer other than saving a couple of $$ on a mortgage app? From a consumer perspective, it doesn't matter if the score comes directly from the CB or FICO. FICO will still use the CB data to generate the score. Each lender will have to request the score individually, and it will still get reported as a HP (even if it's only counted as one HP). I guess this is corporate infighting spilling over into the public domain.

I've read so many social media responses to this news. What's really crazy (and scary) is the number of people who have no clue how it works and thinks this will somehow change their credit worthiness.

Re: FICO to start selling mortgage scores directly to resellers (lenders)

NoHardLimits — Sat, 01 Nov 2025 02:25:39 GMT

Another Wall Street Journal article on the escalating fight between FICO and major credit bureaus over mortgage scoring:

https://www.wsj.com/finance/banking/fico-fight-over-credit-scores-mortgages-c25b1c62?mod=banking_news_article_pos1

The article is paywalled, but here is the most relevant section:

"FICO raised its pricing for the credit-reporting firms. The price per mortgage score would double to $10 next year. Then it announced a more dramatic move to cut out VantageScore’s backers, the three credit-reporting firms. Federal guidelines require home lenders to evaluate credit scores and reports from several credit-reporting firms. That created another invisible player in this market: companies that gather up the reports from all three and sell a combined report. In the jargon of consumer lending, they became known as “tri-merge resellers.” FICO decided to allow tri-merge resellers to calculate scores themselves by making its “black box” more available. FICO will charge those companies $4.95 per score, plus an additional $33 if the loan closes. The move cuts out the trio, whose shares sank while FICO surged. They responded with deals that include giving away VantageScore, free, for many loans."