Overview

• FICO introduced a Mortgage Direct License Program that lets tri-merge resellers calculate and deliver FICO Scores directly to customers, removing dependence on Equifax, TransUnion and Experian for score distribution.
• The company offered two pricing choices: a $4.95 royalty per score plus a $33 funded-loan fee per borrower per score, or a flat $10 per score, which FICO says can reduce per-score costs by up to 50%.
• FICO noted its scores will still be available through the three bureaus on the same terms, and it is working with tri-merge resellers to implement the new distribution model.
• Markets reacted quickly, with Fair Isaac shares up about 20% while Experian, Equifax and TransUnion traded lower in early sessions.
• Analysts said the move removes bureau markups and could weigh on bureau margins, with some estimating a 10% to 15% hit to earnings.