Fair Isaac came out with new alternatives for lenders to bypass credit bureaus in obtaining a FICO score.
FICO would make much more money per score under these new options, taking from the revenue pie of credit bureaus.
Credit bureau stocks fell as FICO soared, but each player is encroaching on the other’s turf.
Shares of Fair Isaac Corporation (NYSE: FICO) were soaring on Thursday, rising 20.5% as of 2:05 p.m. ET.
Fair Isaac is the dominant credit scoring company in the U.S. and the inventor of the FICO score. Today, the company revealed new pricing models that would allow mortgage lenders to bypass traditional credit bureaus and receive a score directly from Fair Isaac — for a price.
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On Thursday, Fair Isaac unveiled its new direct-to-lender program with two main new options. The first option is for a lender to pay the typical $4.95 per FICO score and another $33 fee if the scored loan closes. The second option is that the lender pays a lower $10 fee per score, regardless of whether the loan closes.
Fair Isaac is making a shrewd move here, as these options amount to a huge price increase. However, by cutting out the credit bureau intermediaries, they actually lower overall end costs for lenders.
Even Federal Housing Finance Agency Director Bill Pulte, who tangled with Fair Isaac earlier this year about past price increases for FICO scores, appeared to support these moves. On X, formerly known as Twitter, he wrote:
I’ve recently had productive conversations with FICO CEO, Will Lansing, and his Representatives. I GENUINELY appreciate FICO taking Constructive Criticism, which was given in the spirit of ensuring a competitive and safe and sound market, to then generate Creative Solutions to…
— Pulte (@pulte) October 2, 2025
Image source: Getty Images.
The reason Pulte may be more supportive of FICO bypassing credit bureaus and taking more industry revenues is that the credit bureaus have also begun to compete with FICO on its own turf. In early July, Pulte announced that his agency would begin to allow mortgage lenders to use VantageScore 4.0, a FICO alternative that was developed by the credit bureaus.
So, rather than this being a purely offensive move, FICO is adapting and reacting to the new competitive environment. And while today’s news is no doubt a positive for FICO, it comes as a counter to a new competitive threat to FICO’s traditional monopoly on credit scoring.
Trading at nearly 70 times earnings and with an evolving competitive landscape, investors should remain cautious on Fair Isaac — although today’s news was definitely a positive development.
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Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool recommends Fair Isaac. The Motley Fool has a disclosure policy.
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