FICO Falls 9% After Freezing Mortgage Score at $10

Fair Isaac shares fell 9.2% premarket on Monday after FICO held its mortgage score price at $10, as regulators put VantageScore on equal footing at Fannie Mae and Freddie Mac.

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What Did FICO Announce?

FICO announced a flat $10 price for its tri-merge mortgage score bundle, covering both the Classic FICO Score and the newer FICO Score 10T. The scores are sold through participating credit report resellers. Pricing applies to lenders and brokers that commit to FICO under the Preferred Program.

The decision breaks with the company's pattern. Regular price increases on mortgage scores have been a main driver of FICO's revenue growth. A freeze shifts the burden to volume and to the company's software business, which has historically carried lower margins than pricing gains.

Why Did FICO Shares Fall?

FICO shares fell because the freeze removes a pricing lever that investors had counted on, at the same time as the competitive threat from VantageScore is growing. The company's valuation had already compressed sharply. Its forward earnings multiple is now well below its five-year average of about 40 times.

The move follows an earlier session on September 29, when FHFA Director Bill Pulte announced that Fannie Mae (FNMA) and Freddie Mac (FMCC) would move to one pricing grid. VantageScore would join the existing Classic FICO grid. FICO stock fell more than 20% shortly after the open that day. Fannie and Freddie support roughly 70% of the U.S. mortgage market.

How Does VantageScore Change the Competitive Picture?

VantageScore 4.0 now competes directly with FICO on price and on regulatory treatment. VantageScore is owned jointly by the three nationwide credit bureaus, including Equifax (EFX) and TransUnion (TRU). It is offered at $0.99 per score, or at no extra charge when bought alongside a FICO score. Against a $10 FICO bundle, that is a gap of roughly ten to one.

Two regulatory changes support the challenger:

• As of October 1, both government-sponsored enterprises price Classic FICO and VantageScore 4.0 on one grid. The 20-point offset that previously applied no longer exists.
• The Federal Housing Administration will accept Classic FICO, FICO Score 10T or VantageScore 4.0 from January 1.

FHFA is also reviewing how many credit reports lenders pull per loan. Cutting the requirement to one or two reports, from the current three, would reduce the volume of scores sold per mortgage and the revenue attached to each.

What Comes Next for FICO?

The next test is fiscal fourth-quarter earnings, due November 4. The results will show whether lender enrollment in the Preferred Program offsets the loss of price increases. Revenue growth is projected to slow from 27% in fiscal 2026 to roughly 8% a year through fiscal 2028. Lender adoption of VantageScore 4.0 and any FHFA decision on credit report requirements will shape the volume side of that outlook.

Outlook

FICO has traded pricing power for volume protection. Regulators have lowered the barriers for VantageScore, and the company's response is a flat $10 price tied to lender commitments. The 9% premarket decline adds to a year of losses and shows that investors now price FICO as a company competing for share, not one setting the terms of the market. The November 4 earnings report is the next checkpoint.