Story Stocks^®

Equifax (EFX) launched a bold challenge to Fair Isaac Corp's (FICO) recent direct-licensing move, announcing a 50% price cut on its VantageScore 4.0 mortgage credit score and free access for customers who buy FICO scores through 2026. The announcement follows the FHFA’s decision to allow Fannie Mae (FNMA) and Freddie Mac (FMCC) to purchase loans underwritten with VantageScore 4.0, marking a pivotal moment in the U.S. credit scoring landscape.

• EFX will offer VantageScore 4.0 mortgage scores at $4.50 per score for two years and provide them free to lenders purchasing FICO scores through 2026.
• FICO recently launched a Mortgage Direct License Program, enabling resellers and lenders to license FICO scores directly, reducing reliance on credit bureaus -- a move viewed as positive for FICO, and negative for EFX and TransUnion (TRU).
• The FHFA’s approval of VantageScore 4.0 for agency-backed loans significantly expands its potential use in mortgage underwriting.
• VantageScore 4.0 leverages trending and alternative data (e.g., rent, utility, and telecom payments), offering broader consumer coverage and promoting credit inclusion.
• EFX’s $4.50 price point will likely compress per-score margins initially but could drive higher VantageScore adoption and volumes if lenders and resellers pivot toward the cheaper option.
• FICO’s new direct-licensing program bypasses the credit bureaus, but EFX’s free-with-FICO offer aims to keep lenders tied to bureau platforms and maintain cross-sell opportunities.

Briefing.com Analyst Insight:

EFX’s announcement is a strategic and defensive maneuver aimed at retaining distribution control and accelerating adoption of VantageScore 4.0. By undercutting FICO’s pricing and tying in free access for existing customers, EFX is directly challenging FICO’s new reseller bypass model. The timing -- just after FHFA’s ruling -- maximizes the impact and could help EFX capture meaningful share in mortgage originations. While the $4.50 pricing could trim per-score revenue, there's significant potential upside if adoption grows sharply. The move also reinforces EFX’s positioning as a data-driven, inclusion-focused competitor, aligning with regulators’ push for broader credit access. The bottom line is that EFX's move raises the competitive stakes and could reshape the credit score market, while offering long-term volume growth potential.