Credit report cost wars ramp up
Over the last few weeks, mortgage brokers have taken to social media to report significant increases in credit score report costs set to take effect in 2026.
For many in the industry, who have seen costs continue to rise over the last few years, this increase felt like the last straw.
Brendan McKay (pictured top), chief advocacy officer and co-founder of the Broker Action Coalition (BAC), feels like the industry has reached a breaking point due to the latest increase.
“It’s burning like even hotter than it necessarily has in years past, although every December there's some level of uproar about it,” McKay told Mortgage Professional America. “It's just pushing us past the breaking point, and it's year after year of the credit bureaus just displaying awful behavior, and it's gotten completely out of control.
“We haven't done the math quite yet, but the credit report costs are approaching a 500% increase in the last four or five years, and it's horrible.”
Calls for regulation
McKay cited a 2024 study by the Community Home Lenders Association (CHLA), which discussed what goes into credit reporting and the costs of the entire process. While they pointed some of the blame at FICO for recent cost increases, they were also concerned that the credit bureaus could charge whatever they wanted because there was no other option for obtaining credit scores.
“Today the risk of market concentration and potential (monopoly) price-setting power appears more in the “backend” world of mortgages, a part not easily understood by consumers and policymakers,” CHLA noted in their report. “In the credit-granting space, CHLA remains concerned that if Washington policymakers look the other way over time, consumers will pay more and more to monopoly providers that can unilaterally charge whatever price they desire – with no market competition, nor public utility oversight, to protect consumers from outright price gouging.”
The third piece of the credit reporting system is the credit report providers, although McKay doesn’t believe they’re to blame for the markups in cost because there's market competition.
“The biggest spike here is FICO drastically increasing the cost of their scoring model, yes, but you're talking about, it's still under $5 of it,” McKay said. “So percentage-wise, the increase is astronomical. And I think what they're doing is awful. But if we're talking about a raw dollar increase, it's the credit bureaus. I don't think any of it is coming from the credit report providers. That is a truly open and competitive market, which I think speaks to the root problem here.
“When you're talking about FICO, they have a monopoly, and the credit bureaus are an oligopoly. Essentially a monopoly, but there are three of them. And like everyone knows, monopolies and oligopolies are bad, but there are some situations where they make sense, like Fannie and Freddie. Here's the difference: (Fannie and Freddie) are very tightly regulated.”
Because there is no government oversight, McKay notes that there is no one to keep price increases in check.
“FICO and the credit bureaus are acting as if they're in an open market and a free market, and they're not,” he said. “They're able to do that because there's no direct regulatory body overseeing them. It is just greed pushed to the limits where everyone's sick of their cr*p. And I think a lot of people in DC are sick of their cr*p, too. I'm hoping this is the breaking point where there's real and substantial pushback and reform, but we'll see. Step one is making a lot of noise.”
Pushback on ending tri-merge
One of the biggest proposals currently under discussion to reduce credit report costs is the end of the tri-merge. This has been suggested by the Mortgage Bankers Association.
The Consumer Data Industry Association (CDIA), which represents the three credit bureaus, pushed back on this idea. They cited a white paper written by Amy Crews Cutts, president and chief economist at AC Cutts & Associates LLC. Cutts said lenders aren’t effectively mitigating their costs, especially the expenses of credit reports pulled for non-approved customers.
“Lenders complain about the costs of credit reports but do not typically take advantage of options currently available to mitigate this burden,” Cutts said in the white paper. “Their real concern is not the burden on borrowers but rather uncompensated fallout costs on home purchase applications. Credit report expenses on home purchase loan applications that did not result in an origination totaled between an estimated $110 and $225 million in both 2023 and 2024.”
This was something also cited by the CHLA in their report.
“In addition, lenders take many applications that never close successfully, and CHLA estimates that of all applications taken, only 20-30% actually close,” the CHLA said. “For the other 70-80% of mortgage applications taken by lenders, the lenders must pull credit reports and pay for them, essentially leading to sunk costs that get built into overhead, such as higher administration fees or increased rates.
“Put another way, in today’s market, prospecting costs that don’t generate revenue eventually get passed on to the consumers that do actually close loans, and the FICO price hikes exacerbate this condition.”
Another point made by Cutts is that even with the cost increases in credit reports, it remains a fraction of the overall closing costs. However, critics say the percentage continues to grow, and it’s the jump for 2026 that has gotten everyone’s attention.
Dan Smith, president and CEO of the CDIA, also stated in a recent op-ed in American Banker that dropping even one of the scores from the tri-merge could drastically change who gets qualified for a mortgage.
“Recent research from TransUnion and Equifax demonstrates the dangers of eliminating even one bureau from the process,” Smith said. “Data from Equifax shows that missing a single tradeline can cause up to 27.8 million consumers to drop to lower score bands, leaving 10 million consumers potentially unscorable and causing 26% to shift from loan-eligible to declined.
“TransUnion found that borrowers affected by the bi-merge system could pay an additional $6,600 in mortgage interest over the loan's lifetime. This is the type of potential consumer harm that could come under a single-pull or bi-merge system.”
The CHLA was skeptical that a move to a bi-merge would even save money, as they surmised that the other credit bureaus would just raise their costs to wipe out the savings.
“Mandating a change from tri-merge to bi-merge and mandating VantageScore 4.0 simply encourages all these entities to increase their pricing by 33.3%,” the CHLA said. “In the context of the recent massive price increases … it seems more likely that these entities will actually increase their profits throughout this transition, paid for on the backs of the very consumers FHFA and the Administration seek to help.”
A portable credit report
McKay acknowledges that major changes to the system, which could provide long-term relief, would likely take considerable time. But there are other options in the meantime.
“I do think long-term the solution is regulation,” he said. “I think to truly open the market up, it could be very messy and take a very long time to basically introduce a bunch of new credit bureaus to the market. I don't know how feasible that is, but I think if it remains a closed market, then there needs to be more regulation.
“In the shortest term possible, everyone needs to make as much noise as possible. They need to be screaming and shouting on social media about it, and they need to be contacting their elected officials. They need to be calling their congressional offices and bringing to their attention how big of a problem this is.”
In addition to the possible move to a bi-merge to save money, McKay believes a system that allows a borrower to use the same credit report across multiple lenders during the loan shopping process could be a viable option. This would keep them from having their credit pulled multiple times and paying for it each time.
“We have started talking about something that we'd like to see more thought and discussion put into, which is giving consumers control of their credit reports,” McKay said. “So, currently, if a borrower comes to me and says, ‘Hey, I just had my credit report pulled by the competitor down the street. Can you just use that report?’ I have to say no, and there's not a good reason for that. Either I'm going to pay $150, or they're going to pay $150 to get the exact same report pulled.”
Peter Idziak of Polunsky Beitel Green urges mortgage brokers to verify that AI tools comply with regulations like ECOA and FHA, stressing the need for transparency in vendor training data and decision-making processes.https://t.co/ZHtnLWoAZS
— Mortgage Professional America Magazine (@MPAMagazineUS) November 26, 2025
By going to a portable report system, not only could it reduce the number of times a report is pulled, potentially saving the end customer money, but it would also let the end customer see exactly how much the reports cost, which would be another way to hold the credit industry accountable for pricing changes.
“We think that consumers should be able to go to either a centralized website or go directly to the credit vendors and pull their own credit report,” McKay said. “They pay for it, then go to a loan officer with a credit reference number that already exists, and whatever login security code stuff needs to be done, and then we can import the credit report.
“It reduces the number of credit reports pulled in aggregate. Also, now consumers are paying for reports, and if they continue to increase their costs, it brings consumers into the fight. And then they’re not blaming us. If I say it's $150 for the credit report, they think I have some margin involved in that. If they're going directly to the providers, it's a different story.”
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
