"AI Summary Fair Isaac Corp.'s (FICO) decision to let resellers calculate and distribute its scores directly to lenders drew a mixed response from the mortgage industry viewed by some as a step toward more competition, but by others as a potential driver of higher credit score costs in the short term. On Wednesday, FICO unveiled the program, which bypasses the three nationwide credit bureaus (Equifax, TransUnion and Experian) by distributing scores directly to credit reporting agencies (CRAs)."
"Federal Housing Finance Agency (FHFA) Director Bill Pulte posted Thursday morning on X a comment saying he genuinely appreciates FICO taking constructive criticism after conversations with CEO Will Lansing. While their decision is a first step, it is appreciated. I encourage the credit bureaus to also take similar creative and constructive actions to make our markets safer, stronger and more competitive, Pulte wrote. To that end, VantageScore should also look at ensuring they are competitive, in every way, including but not limited to costs."
"FICO will offer lenders two pricing options. Under the performance model, lenders pay a $4.95 royalty fee per score plus a $33 fee per borrower per score on funded loans a structure suited for lenders with high fallout rates. The traditional model remains unchanged at $10 per score through tri-merge resellers, consistent with previous pricing. Lenders may also continue working directly with the credit bureaus if they choose."
Fair Isaac Corp. (FICO) will let resellers calculate and distribute its scores directly to lenders, bypassing the three nationwide credit bureaus (Equifax, TransUnion and Experian) by distributing scores directly to credit reporting agencies (CRAs). The change occurs amid competition with VantageScore, whose VantageScore 4.0 will soon be eligible for loans purchased by Fannie Mae and Freddie Mac. Federal Housing Finance Agency Director Bill Pulte praised FICO’s constructive response and urged bureaus and VantageScore to take similar steps and consider competitiveness, including costs. FICO will offer two pricing options: a performance model with royalties and per-borrower fees, and an unchanged traditional $10 tri-merge reseller model. Lenders may still work directly with bureaus. The mortgage industry reaction was mixed, with concerns about potential short-term cost increases.
Read at www.housingwire.com
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