Shares of Fair Isaac (FICO) plunged 21% on Thursday, September 4, 2026, following an announcement by Bill Pulte, Director of the Federal Housing Finance Agency (FHFA). Pulte directed Fannie Mae and Freddie Mac to immediately approve all lenders to use VantageScore, a rival credit scoring system. This move is seen as a direct challenge to FICO's long-standing dominance in the mortgage credit scoring market, which Pulte described as a "monopoly." Pulte highlighted that FICO had increased the price per person's credit score by 1,800% since 2020.
In addition to FICO's decline, the three major credit reporting agencies—Equifax, Experian, and TransUnion—also experienced stock price drops. Equifax fell 4.3%, Experian 5.8%, and TransUnion 5.8% premarket. These companies jointly own VantageScore, but Pulte also criticized them for allegedly overcharging Americans for too long. He stated that the FHFA is seriously considering stronger solutions, including a "bi-merge" framework and options like "SAFER and SOUNDER," to address what he called "cartel-like" behavior from the credit bureaus.
Pulte's directive expands on an initial limited rollout of VantageScore, which he said had been incredibly successful, with 50 lenders already delivering loans using the system. The Trump administration official emphasized that the aim is to lower costs for homebuyers and boost competition. This action aligns with the 2018 Credit Score Competition Act, signed by President Donald Trump during his first term, which aimed to enable Fannie Mae and Freddie Mac to approve more advanced credit score models for mortgage underwriting.
The FHFA's move signifies a significant shift in the mortgage lending landscape, introducing more competition and potentially lowering costs for consumers. While VantageScore has applauded the move, the long-term implications for FICO and the credit bureaus, particularly concerning the proposed "bi-merge" and other structural changes, remain uncertain. The market reaction indicates that investors perceive these actions as a substantial threat to the established order in the credit scoring industry.
