In a move that's rattling the foundations of the credit industry, Fair Isaac Corporation—better known as FICO—unveiled a new program on October 1, 2025, allowing mortgage lenders to snag FICO scores straight from the source, skipping the usual middlemen like credit bureaus. This Mortgage Direct License Program promises to slash prices by 50% per score, a direct jab at the hefty markups bureaus have long enjoyed. Indeed, the announcement hit like a thunderclap, sending FICO's stock soaring more than 16% in early trading the next day, while shares in Equifax plunged over 8% amid fears of lost revenue streams.
However, it's not just about the immediate price swings. FICO, the powerhouse behind the ubiquitous FICO Score used in everything from loans to rentals, has positioned this as a win for transparency and competition in mortgage lending. Lenders and resellers can now bypass outfits like Equifax, TransUnion, and Experian, potentially reshaping how credit data flows in a market worth billions. Moreover, FICO's executives framed it as an evolution, effective right away, but critics might see it as a calculated power play that exposes the vulnerabilities in the bureau model. Equifax, already under scrutiny from past data breaches, now faces a squeeze on its core business of bundling and selling these scores at a premium.
The fallout extended beyond Wall Street. Shares of other bureaus tumbled too—TransUnion down sharply, Experian feeling the heat overseas—highlighting how intertwined these players have been. FICO's stock, trading around $1,800 post-surge, reflects investor bets on the company's pivot toward direct sales and AI-driven analytics. Yet, for Equifax, with its market cap taking a hit, the day underscored a harsh reality: innovation from partners can quickly turn into disruption. Indeed, this shift comes at a time when mortgage volumes are rebounding, making the timing all the more pointed.
Still, as regulators watch and lenders adapt, one wonders if this direct path will truly democratize credit access or just consolidate power further in FICO's hands.