• Key Insight: How FICO is planning to freeze pricing for lenders who commit to it as major players adopt VantageScore.
• Supporting Data: FICO's stock price fell 13% Monday following its announcement and commentary from FHFA director Bill Pulte.Overview bullets generated by AI with editorial review.

As large lenders increasingly utilize VantageScore 4.0 in the government-sponsored enterprise market, Fair Isaac Corp. is launching a flat fee initiative encouraging lenders and brokers to commit to its credit metrics.

But in the wake of the announcement, Federal Housing Finance Agency Director Bill Pulte said he would be bringing more competition to the mortgage credit score space, initially causing FICO's stock to fall by 13% on Monday. Its drop slowed Tuesday when shares were down  by around 2% midafternoon in the trading day.

"We're taking more action this week to ensure competition is real and not fake, or manipulated," Pulte wrote in the X post. 

The company revealed Friday it will maintain its mortgage price for credit scores through its tri-merge resellers at $10 for "Preferred Program" members. The bundled deal includes both the classic FICO score and the newer 10T metric the GSEs also plan to add alongside VS4.

"We're ensuring lenders have access to the trusted and predictive tools they need to assess risk with confidence," FICO CEO Will Lansing said in the release. "Better risk decisions strengthen the mortgage market and help lenders responsibly expand access to credit."

By entering the program, lenders who commit to FICO access through tri-merge resellers gain access to credit bureau data and rental payment history at a constant price. FICO has raised prices notably in past years in conjunction with the bureaus.

Pulte has hinted that he may allow alternatives to tri-merged credit reports in addition to introducing more competition to the classic FICO.

Offering a bundled package is aimed at ensuring mortgage customers remain within the FICO ecosystem while the GSEs transition to scores that utilize trended data.

FICO has long been the primary mortgage credit score provider and both it and the bureaus have contributed to price hikes in recent years. Pulte has said he plans to bring more competition to both the bureaus and FICO.

"Abusive monopolies will not be allowed to take advantage of consumers anywhere in the mortgage market," he wrote in another X post Monday.

FICO and the bureaus have asserted that they do face competition. In addition to now rivaling each other in the GSE market, they face an even larger breadth of rivalry in other consumer finance lines, where multiple score types are used and the tri-merge is not required.

Prior to FICO's announcement, VantageScore landed the latest blow in the ongoing credit score war between the two models. Less than a month ago, TransUnion, one of the three credit bureaus that jointly owns VantageScore, announced the extension of its discounted 99-cent pricing for 4.0 through the end of 2028.

Pulte also ordered Fannie Mae and Freddie Mac to accept VantageScore 4.0 for all lenders last month, while some major lenders, including Rocket Mortgage and Pennymac, adopted the model as a result. Around 5-6% of the loans sold to the GSEs recently have had VS4 scores.