Is the cost of obtaining a credit score about to drop?
Fair Isaac Corp (FICO) has announced it will license its credit scores directly to mortgage resellers, bypassing the traditional gatekeepers—Experian, Equifax, and TransUnion.
The move sent FICO shares surging over 10% in premarket trading, while the major credit bureaus saw their stocks tumble, with Equifax dropping 12%, TransUnion 11%, and Experian 8% in London.
FICO’s direct licensing program, which offers two pricing models, aims to bring immediate cost savings and price transparency to lenders and brokers. Under the new “performance model,” the royalty fee drops to $4.95 per score, or a 50% reduction, while a $33 funded loan fee applies per borrower when a loan closes.
Alternatively, lenders can stick with the current $10 per score model, mirroring the average price previously charged by the bureaus.
“Direct licensing of the FICO Score brings transparency, competition, and cost-efficiency to the mortgage lending process,” Will Lansing, FICO’s CEO, said.
“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.”
Industry analysts warned the change could hit bureau earnings by 10% to 15%. Citigroup analysts said, “It implies that this would cut out the margin that the likes of Experian and Equifax make on the FICO credit score.”
FICO’s move marks the latest development in a dramatic year for credit scoring and the mortgage space. Earlier, the Federal Housing Finance Agency let lenders use VantageScore—created by the three main credit bureaus—for Fannie Mae and Freddie Mac loans. This move brought new competition for FICO and came after criticism over its pricing, raising doubts about whether FICO could keep raising its fees.
In a shift that underscores the growing influence of short-term installment loans, Fair Isaac Corporation, commonly known as FICO, has announced it will begin incorporating buy-now, pay-later data into its credit scoring formulas for the first time.https://t.co/oRCzHY5tU0
— Mortgage Professional America Magazine (@MPAMagazineUS) June 23, 2025
The direct licensing model could reshape the mortgage credit ecosystem. By cutting out the middleman, FICO’s new model could lead to lower costs for lenders and, potentially, for borrowers. Mortgage professionals have long called for more transparency and efficiency in credit scoring, and this direct licensing approach delivers on both fronts.
The change also puts pressure on the major credit bureaus to rethink their business models. With FICO now dealing directly with resellers, bureaus may need to innovate or bundle new services to stay competitive. Some industry observers believe this could spark a wave of new offerings and partnerships in the credit data space.
For lenders, the ability to access FICO scores more directly may mean faster turnaround times and greater flexibility in integrating credit data into their systems. This could streamline the mortgage approval process and improve the borrower experience.
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