FICO Shares Fall as FHFA Ends Mortgage Scoring Monopoly

Fair Isaac Corporation (NYSE: FICO) shares fell after the Federal Housing Finance Agency ordered an end to the company’s exclusive hold on mortgage credit scoring. Reuters reported that FHFA Director Bill Pulte directed Fannie Mae and Freddie Mac, the government-backed entities that buy and securitise most US mortgages, to permit all lenders to use VantageScore 4.0 immediately. VantageScore is a rival scoring model jointly owned by Equifax, Experian and TransUnion. The order removes the requirement that GSE-eligible mortgages use the FICO Score exclusively, ending a regulatory backstop that had underpinned FICO’s mortgage pricing power for decades.

FICO shares closed yesterday at $1,118.93, up 1.77% from $1,099.45 the previous session. That level remains well below the stock’s 52-week high of $1,998.01, with shares already down roughly 31% this year following a 17% one-day drop after a Q3 revenue miss on 29 July. Benzinga and TradingView reported the stock falling further in pre-market trading today on the FHFA news.

The stakes are significant for FICO’s earnings mix. Scores segment revenue rose 41% year-on-year in the third quarter of fiscal 2026, with mortgage originations making up 71% of B2B Scores revenue and 62% of total Scores revenue. Wolfe Research had already downgraded FICO to Peer Perform on 9 August, warning that over 20% of the mortgage market was exposed to score arbitrage, where lenders pull both scores and pick whichever is more favourable to the borrower.

The move strips away the exclusivity that let FICO charge a premium for mortgage scoring, and it is that loss of pricing power, not a change in mortgage demand, that the market is now working through.