In a move that's rippling through the financial sector like a sudden storm, Fair Isaac Corporation—better known as FICO—unveiled its new Mortgage Direct License Program on October 1, 2025. The announcement, effective immediately, lets mortgage lenders snag FICO Scores straight from the source, skipping the usual middlemen: the big credit bureaus. FICO's stock? It rocketed more than 16% in trading on October 2, closing out a banner day amid the buzz.
Indeed, the shift couldn't come at a worse time for players like Equifax. Shares in the credit reporting giant plunged over 8% that same morning, as investors scrambled to digest the implications. For years, bureaus such as Equifax, TransUnion, and Experian have pocketed hefty markups by reselling FICO Scores to lenders. Now, with FICO slashing prices by 50% per score under this direct model, those profits look suddenly vulnerable. TransUnion and Experian stocks followed suit, dipping sharply and underscoring the fragile interdependence in this corner of finance.
However, FICO isn't just disrupting; it's positioning itself as the disruptor-in-chief. The company, already a powerhouse with its scores used in over 90% of U.S. lending decisions, argued the change brings more transparency and competition to mortgage scoring. Analysts are mixed—some hail it as innovative, others worry about short-term chaos for the industry. FICO's market cap now tops $46 billion after this surge, a testament to Wall Street's quick embrace of the strategy.
Moreover, this isn't FICO's first rodeo in evolving its offerings. They've been pushing AI-driven tools and global expansions, but cutting out the bureaus feels like a bolder stroke, especially with regulatory eyes on data accuracy and breaches plaguing the sector. Equifax, still smarting from past hacks, faces added pressure to adapt or promote rivals like VantageScore.
Yet as these titans jostle for position, one wonders how this realignment might ultimately reshape access to credit for everyday borrowers.