Fair Isaac (FICO) Stock Craters 20% as Its Mortgage Monopoly Cracks

TLDR

• Fair Isaac stock dropped 20% Tuesday premarket to $675.39, its worst move in more than six years.
• FHFA Director Bill Pulte announced Fannie Mae and Freddie Mac will use one mortgage pricing grid instead of two.
• The new grid adds VantageScore, a rival credit score from Equifax, TransUnion and Experian, alongside FICO Classic.
• Rocket Mortgage said it will default to VantageScore 4.0 for eligible loans starting in the fourth quarter.
• FICO stock has fallen 50% this year and sits far below its November 2024 record high of $2,382.40.

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Fair Isaac stock ($FICO) sank 20% in premarket trading Tuesday, hitting $675.39. That put the stock on pace for its worst daily drop in more than six years.

Fair Isaac Corporation, FICO

The slide followed a 2.6% dip Monday. Together the moves pushed FICO toward its lowest close since April 2023.

The trigger was a social media post from Bill Pulte, director of the Federal Housing Finance Agency. He said mortgage pricing is being simplified for borrowers.

A Single Pricing Grid

Fannie Mae and Freddie Mac will move to one pricing grid instead of the two they used before. The new setup folds VantageScore in next to FICO Classic.

VantageScore is a joint venture between Equifax, TransUnion, and Experian. It has long competed with FICO for a slice of the credit scoring business.

For decades, home buyers needed a FICO score to get a mortgage. This change means lenders no longer have to pay for one.

Pulte confirmed the details in his post. He wrote that Fannie and Freddie are moving to one pricing grid with VantageScore joining the existing FICO Classic grid.

This isn’t the FHFA’s first move against FICO’s position this year. On September 9, the agency dropped the requirement for lenders to get prior written approval before using VantageScore 4.0.

Rocket Mortgage Makes Its Pick

Rocket Mortgage added to the pressure Monday. The lender, part of Rocket Cos., said it will be the first to make VantageScore 4.0 its preferred scoring model.

Rocket said it will default to VantageScore in the fourth quarter for loans headed to Fannie Mae and Freddie Mac. That’s one of the largest mortgage lenders in the country picking a side.

FICO stock has been sliding since its record close of $2,382.40 in November 2024. Pulte has repeatedly said he wants more competition in credit scoring.

The stock has dropped 27% this month alone. It is down 50% for the year as of Monday’s close.

Other credit bureau stocks moved too. TransUnion fell 4.3% and Equifax dropped roughly 4% in premarket trading, while Rocket Cos. stock climbed 1.6%.

The broader market gave FICO no cover Monday. The S&P 500 finished flat, the Dow edged higher, and the Nasdaq closed slightly lower, pointing to a drop driven purely by company-specific news.

FICO stock had already fallen from a 52-week high of $1,998.01. The after-hours and premarket trading Tuesday pushed it to a fresh 52-week low near $832.