FICO, a global analytics software leader, has announced the launch of its FICO® Mortgage Direct License Program, enabling tri-merge resellers to calculate and distribute FICO Scores directly to mortgage industry participants and introducing new pricing models designed to increase transparency and reduce costs.
This initiative marks a significant shift in the delivery of FICO® Scores to the mortgage industry, providing tri-merge resellers with the option to bypass the three nationwide credit bureaus for score distribution. This change aims to eliminate unnecessary mark-ups on the FICO Score and offers mortgage lenders, mortgage brokers, and other industry participants greater choice in their pricing models. Firms preferring to work through credit bureaus can continue to do so.
To expand options for industry participants, FICO is introducing two alternative pricing models. The new performance model is structured around successful mortgage funding, acknowledging the FICO® Score’s role in facilitating mortgage liquidity and reducing lender expenses. Under this model, the royalty fee for the FICO Score will be $4.95 per score, which represents a 50% reduction in average per-score fees into the tri-merge resellers by removing credit bureau mark-ups. A funded loan fee of $33 per borrower per score will be applied when a FICO-scored loan is closed. This funded loan fee replaces previous charges for re-issuing FICO Scores, intended to broaden utility for mortgage insurers, Government Sponsored Enterprises (GSEs), investors, and rating agencies in the originating market.
Alternatively, lenders have the option to continue with the existing per-score-only pricing model. This model maintains a $10 per score fee into the tri-merge resellers, which aligns with the average price previously charged by credit bureaus for the FICO® Score. This option is designed to ensure no increase in per-score fees for lenders.
Will Lansing, Chief Executive Officer of FICO, stated, “Today marks a turning point in how credit scores are delivered and priced across the mortgage industry. Direct licensing of the FICO Score brings transparency, competition, and cost-efficiency to the mortgage lending process. This change eliminates unnecessary mark-ups on the FICO Score and puts pricing model choice in the hands of those who use FICO Scores to drive mortgage decisions.”
FICO will extend both new mortgage score pricing models to the three nationwide credit bureaus under the same terms. However, FICO does not control any potential mark-ups that bureaus may apply within their respective channels. FICO highlights its position as the sole independent analytics provider and the only score with consistent, predictable performance across a complete economic cycle, including periods of stress such as the Great Recession. The FICO® Score is utilized by 90% of top U.
S. lenders to make consistent, fair, and informed credit decisions.
This new program aligns with directives from policymakers and industry leaders advocating for the modernization of credit infrastructure and the promotion of affordability, liquidity, and access within the $12 trillion U.
S. mortgage industry. FICO is currently collaborating with mortgage tri-merge resellers to implement the new direct license program. FICO, founded in 1956, is a pioneer in predictive analytics and data science, holding over 200 US and foreign patents on technologies designed to enhance profitability, customer satisfaction, and growth for businesses across various sectors globally.
