Shares of Fair Isaac, the company behind the FICO credit score, plunged about 20% in premarket trading on Tuesday, September 29, to $675.39, putting the stock on pace for its worst daily drop since March 16, 2020, and its lowest closing price since April 6, 2023, according to Dow Jones Market Data (Barron’s). The stock entered Tuesday having already lost half its value this year (Investopedia).
The trigger was a Monday evening post from Federal Housing Finance Agency Director Bill Pulte. On X, Pulte said Fannie Mae and Freddie Mac are moving from two separate mortgage pricing grids to one, and that VantageScore, a joint venture of credit bureaus Equifax, Experian, and TransUnion, would join the existing FICO Classic pricing grid. “Instead of two separate pricing grids, which makes zero sense, Fannie and Freddie are hereby moving to ONE PRICING GRID with VantageScore joining the existing FICO Classic pricing grid,” he wrote (Investopedia, Barron’s).
That one sentence ends a long monopoly. For decades, if you wanted a mortgage, you needed a FICO score. Lenders may now be able to bypass Fair Isaac entirely, which goes straight at the company’s most reliable revenue stream (Barron’s).
The news hit from two sides at once. Late Monday, Rocket Mortgage, a unit of Rocket Companies, said it will become the first mortgage lender to use VantageScore 4.0 as its preferred scoring model for all eligible loans. After roughly four months of testing, the company found VantageScore helped more clients qualify for mortgages while reducing credit scoring costs (Investopedia). Deutsche Bank analyst Faiza Alwy noted that Rocket holds 5% to 6% market share as an originator, and the worst-case scenario for Fair Isaac is that Rocket simply stops pulling FICO scores on eligible loans (MarketWatch). Separately, TransUnion extended its 99-cent pricing for VantageScore 4.0 through December 2028, locking in a cheap alternative for years (Seeking Alpha).
The tremors reached the bureaus themselves. Equifax, one of VantageScore’s owners, fell 2.81% in premarket trading (Schwab Network).
Why this matters to you: the number behind your mortgage is changing. A unified pricing grid with two competing scores could mean lower costs and more approvals for borrowers, since Rocket’s own testing found more clients qualified under VantageScore. This lands while mortgage rates hover around 7.5%, held aloft by record-high Treasury yields, freezing much of the housing market (Investors.com).
What to watch next: whether other major lenders follow Rocket’s lead, and how Fannie and Freddie write the rules for the new single grid. A score that ruled American housing for a generation may be learning what competition feels like.
