FICO holds its $10 mortgage toll as the regulator and the bureaus close in
Fair Isaac held its $10 mortgage score price rather than match VantageScore's 99 cents; with pricing frozen, origination volume becomes the whole story, and a Fed decision lands this week before earnings on November 4.
Richard Tang · 3 min read
Fair Isaac+1.79% — Fair Isaac, up 1.79 percent today is refusing to cut its mortgage toll. On Friday it held the $10 per-score price for lenders who commit to its new Preferred Program, bundling its classic FICO score with the newer trended-data 10T metric, bureau data and rental history at one constant price, rather than matching the 99 cents VantageScore charges 12. The market's verdict was fast: the stock fell 13% on Monday after FHFA director Bill Pulte, whose agency regulates Fannie Mae and Freddie Mac, promised on X "more action this week to ensure competition is real" 113.
The distributor and the competitor are the same companies
The squeeze has a structure. VantageScore is not a startup: it is the joint venture founded in 2006 by Equifax+0.32% — Equifax, up 0.32 percent today, Experian and TransUnion−1.94% — TransUnion, down 1.94 percent today, the same three credit bureaus that resell FICO's scores to lenders 2. For most of three decades a mortgage could not be sold to Fannie Mae or Freddie Mac without a FICO score, which is how the price went from under a dollar in 2018 to $10 this year 1112.
Last month Pulte ordered the two government-sponsored enterprises, which buy most US mortgages, to accept VantageScore 4.0 from all lenders 11012. Rocket Mortgage and Pennymac adopted it, and Fannie Mae says 37% of September applications in its underwriting system carried a VS4 score 11012. TransUnion extended its 99-cent pricing through 2028 1.
FICO's bundle answers on both ends. Selling at a frozen $10 through the tri-merge resellers, the intermediaries that package the three-bureau credit pull lenders must buy, recaptures the resale markup the bureaus used to keep, and the commitment to pull FICO on every relevant application blunts a lender's incentive to shop the cheaper score 28. The Mortgage Bankers Association welcomed the move but noted it remains unclear whether lenders actually pay less 2.
Volume is now the swing factor, and volume is a rates story
Holding the price means mortgage revenue is price times volume, and volume is origination, which moves with rates. Analysts expect revenue growth to slow from 27% in fiscal 2026 to about 8% a year through fiscal 2028, with the flat price pushing more of that growth onto volume 9. JPMorgan cut its target to $900 from $1,530 and put FICO on its list of stocks hurt by higher rates, because scoring fees ride mortgage volumes 3.
Six years of price increases took revenue from $1.3B to $2.0B
Data
| Revenue | |
|---|---|
| FY2020 | $1.3B |
| FY2021 | $1.32B |
| FY2022 | $1.38B |
| FY2023 | $1.51B |
| FY2024 | $1.72B |
| FY2025 | $1.99B |
Analyst targets cluster near $900, well above the fallen share price
Data
| Value | |
|---|---|
| JPMorgan | 900 |
| UBS | 942 |
| Mizuho | 986 |
| Share price | 705 |
The Street split anyway: BMO and UBS cut their targets on the flat pricing outlook, Wells Fargo+1.96% — Wells Fargo, up 1.96 percent today downgraded to Hold, while Goldman Sachs+1.42% — Goldman Sachs, up 1.42 percent today and Mizuho kept Buy ratings, Mizuho at $986 567. The stock sits near $705 to $815 depending on the hour, roughly half its 52-week high, on 84% gross margins 2913.
Two dated events settle the next move
The Federal Reserve's rate decision lands this week, with markets expecting a pause while the 30-year mortgage sits above 7%, the level that keeps originations, and FICO's volume, thin 810.
Then FICO reports fiscal fourth-quarter results on November 4, the first read on whether Preferred Program sign-ups make up for the flat price 9. Outside mortgage the moat still holds: Arvest Bank just upgraded to FICO Auto Score 10 4. The defend-the-price bet lives or dies on volume, and the reader can watch the first lever move before the week is out.
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