In a move that's rattling the foundations of the credit reporting world, Fair Isaac Corporation—better known as FICO—unveiled a new program on October 1, 2025, allowing mortgage lenders to snag FICO Scores directly, skipping the usual middlemen like Equifax. The announcement hit like a thunderclap, sending FICO's stock soaring more than 16% in midday trading on Thursday, while shares in Equifax plunged over 8%. It's the kind of disruption that feels both innovative and a bit ruthless, cutting out layers that have long padded the pockets of credit bureaus.
The details are straightforward enough, yet profoundly disruptive. Under the new FICO Mortgage Direct License Program, lenders and resellers can license scores at 50% lower prices than before, effective immediately. No more relying on bureaus to bundle and markup these essential tools for mortgage approvals. FICO, the pioneer behind the iconic score used in 90% of U.S. lending decisions, is essentially reclaiming control. Indeed, this shift promises more transparency in pricing for the industry, but it leaves giants like Equifax scrambling. Their stock drop wasn't isolated; TransUnion and Experian saw similar hits, dipping around 5-7% as investors fretted over eroded margins.
However, the bigger picture here is how FICO's gamble underscores the evolving tensions in financial data. The company, already riding high with a market cap pushing $50 billion after the surge, has been expanding its AI-driven analytics globally. Partnerships and tech upgrades have fueled steady growth—second-quarter earnings hit $6.59 per share just months ago—but this direct-sale pivot feels like a power play. Critics might whisper that it's undercutting competitors unfairly, yet FICO frames it as boosting competition and efficiency for lenders facing tight margins in a high-interest environment.
Moreover, Equifax, still smarting from past data breaches and regulatory heat, now confronts a revenue squeeze on its core score-distribution business. Analysts are buzzing, with some hiking FICO targets to $2,400 while downgrading bureau outlooks. It's a stark reminder of how quickly alliances can fracture in this opaque sector.
One wonders if this direct path will ultimately benefit consumers with fairer lending, or just consolidate power in fewer hands.