Fair Isaac Corp. shares plunge 21% as Bill Pulte orders end to FICO’s credit scoring monopoly

FICO’s decades-long grip on the credit scoring market just got pried open. Fair Isaac Corp. shares cratered as much as 20.9% intraday on September 4, falling to around $885, after Federal Housing Finance Agency Director Bill Pulte ordered Fannie Mae and Freddie Mac to immediately approve VantageScore 4.0 for all lenders. The directive transforms what had been a small pilot program with roughly 50 lenders into a sweeping mandate that could fundamentally alter how American mortgages get underwritten. Pulte, never one to mince words, put it bluntly on social media: “FICO has enjoyed a monopoly. No more.” What Pulte is actually doing The FHFA directive does two things simultaneously. First, it forces the two government-sponsored enterprises that backstop the majority of US mortgages to accept VantageScore 4.0 alongside FICO scores from all lenders, not just a handpicked group of 50. Second, it puts a spotlight on what Pulte characterizes as runaway pricing in the credit reporting industry. VantageScore 4.0 is jointly owned by Equifax, Experian, and TransUnion, the three major credit bureaus. Unlike traditional FICO models, it incorporates rental and utility payment histories into its c...