Business — Noozify Original — October 6, 2026

FICO's Mortgage Credit Score Toll, From 60 Cents to $10

By Adam Canissario

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Anyone who has applied for a mortgage has paid for a number, usually without knowing it. It is the FICO score, the three-digit credit rating that lenders use to judge how likely a borrower is to repay, and one company, Fair Isaac, makes it. For decades it cost lenders well under a dollar. This year it costs $10, and lenders buy it several times for each borrower.

That arrangement took its first real hit on Monday, September 28th. Bill Pulte, who runs the Federal Housing Finance Agency, the regulator in charge of the mortgage giants Fannie Mae and Freddie Mac, posted a chart on X showing that the two companies would now charge borrowers the same way whether a loan came with a FICO score or with a cheaper rival called VantageScore. The next day Fair Isaac's stock fell as much as 26 percent, the worst day in its history, according to a report on Yahoo Finance.

To see why one chart mattered so much, it helps to know what Fannie and Freddie do. Most lenders don't keep the home loans they make. They sell them to Fannie or Freddie, two companies chartered by Congress, which bundle the loans into bonds for investors and guarantee that the investors will be paid. Because the two buy so much of the market, their rules become everyone's rules.

One of those rules dates to 1995, when Freddie Mac and then Fannie Mae sent lenders letters that, as the Federal Reserve Bulletin described the next year, strongly encouraged them to use credit scores in deciding who qualified for a loan. The letters named three scores, each sold under the brand of a different credit bureau, the companies that keep records of people's loans, cards, and bills. Fair Isaac had built all three. Its chief executive, Will Lansing, has argued that Fannie and Freddie chose the score voluntarily because lenders were already using it. Either way, every step a mortgage passes through, from approval to pricing to the bonds, came to be built around a FICO score.

The score is also never bought just once. A lender pulls a credit report from each of the three national bureaus, Equifax, Experian, and TransUnion, and each report comes with its own FICO score. The lender uses the middle one, a practice researchers at the Urban Institute, a Washington think tank, call the tri-merge median. That makes three scores for one borrower and six for a couple, paid for whether or not the purchase goes through.

For years the fee hardly mattered. FICO says its price stayed essentially flat for nearly 30 years, and that its first mortgage price change, in 2018, set it at roughly 50 to 60 cents a score. Starting in 2023 it rose every year, to $3.50 in 2024, $4.95 in 2025, and $10 a score for 2026. FICO says the $10 only matches what lenders were already paying after the bureaus added their own markup. Even so, lenders were warned that their credit-report bills could rise as much as 50 percent this year.

It has paid off for the company. In the three months to June, Fair Isaac's revenue from mortgage scores rose 97 percent, even though the number of new mortgages barely grew. FICO argues that the score is a rounding error, about two-tenths of one percent of a buyer's closing costs. The catch is that nobody buying a home is allowed to skip it.

Washington has been trying to add a competitor for years. Loans sold to Fannie and Freddie long required a score from a single model. Congress told the housing agency in 2018 to find a way to approve others, and in 2022 it approved two. The switch kept slipping until July 2025, when Pulte let lenders choose between the classic FICO score and VantageScore 4.0. VantageScore is jointly owned by the three credit bureaus, and TransUnion sells it to mortgage lenders for 99 cents through the end of 2028, or for nothing extra when it comes bundled with a FICO.

Until September 28th, though, choosing VantageScore came with a penalty. Fannie and Freddie set part of a borrower's fees from a pricing table in which lower scores pay more, and a VantageScore had 20 points knocked off before it was looked up. Pulte's new table drops that penalty, and the change matters because VantageScore tends to run higher. An Urban Institute comparison found that on the same loans it came out about 14 points higher on average, while the two scores were about equally good at predicting who would fall behind on payments.

With one table and no penalty, a lender can pull both scores and use whichever is better for the borrower. For some buyers that is real money. In an Urban Institute example, a borrower with a $300,000 loan and a FICO score just under 640 saves about $920 in fees if a VantageScore lifts them into the next, cheaper band. Rocket Mortgage, which ran both scores on 1.4 million credit reports this year, says borrowers who did better under VantageScore saved an average of $1,600 at closing, and it plans to make VantageScore its preferred score on all eligible loans. With 30-year rates back above 7 percent, any saving counts.

The savings have another side. Those fees are how Fannie and Freddie charge for the risk of default, and Urban estimated that score shopping would cut them by roughly $675 million, based on last year's lending. If the old fees were right, as Jaret Seiberg of the investment bank TD Cowen pointed out, the two companies are now taking more risk for less pay.

The biggest reason FICO may keep getting paid has to do with what happens to a mortgage after closing day. Most end up in the bonds Fannie and Freddie sell, and the investors who buy those bonds judge them with models built on FICO scores, because for 30 years that was the only score the loans carried. Seiberg noted that this market still wants FICO. Fannie and Freddie will start showing investors more than one score on October 19th, but their published VantageScore record on these loans only goes back to 2013. It has never been through a housing crash. FICO's has.

That gives lenders a reason to keep buying a FICO score even when they don't need it to approve a loan, because a loan investors understand sells for a better price. In August, Lansing told analysts the company had seen no loss of business, which he read as lenders buying both scores.

FICO has also proposed a different way to pay for its score. Under a plan announced last year, a lender would pay $4.95 a score up front, about half the usual price, and another $33 a score only if the loan actually closes. Applications that fall through would get cheaper, and finished mortgages more expensive. As of August, the plan was still waiting for approval from Fannie or Freddie.

What lenders have been paying for was never mainly the math, since the two scores are about equally accurate. It was that everyone, from the loan officer to the bond buyer, agreed to use the same three digits. Washington can change which score a lender is allowed to send. It cannot quickly change which score an investor trusts, and until VantageScore has lived through a bad year in the housing market, FICO keeps its toll booth, even with a second lane now open beside it.