Rewrites headline and paragraph 1 with executive comments from conference call, adds details and context throughout
By Manya Saini
Feb 4 (Reuters) - Equifax EFX.N CEO Mark Begor said on Wednesday the adoption of credit score VantageScore is expected to accelerate as regulatory clarity emerges on its use in the mortgage market, after the credit bureau forecast strong annual profit growth.
The mortgage scoring market is dominated by Fair Isaac Corp FICO.N, which last year unveiled plans to sell its 'FICO' credit scores directly to mortgage lenders and resellers, bypassing credit bureaus.
Founded in 2006, FICO rival VantageScore is jointly owned by credit bureaus Equifax, Experian EXPN.L and TransUnion TRU.N.
Federal Housing Finance Agency director Bill Pulte said in July he will allow mortgage finance giants Fannie Mae and Freddie Mac to use VantageScore 4.0 to increase competition in the credit scoring industry.
"The significant hurdle that's left is the FHFA as well as Fannie and Freddie completing their work from a technology and planning process," Begor said on a call with analysts.
He added that Vantage is widely adopted in the non-mortgage space and a handful of lenders have already made the conversion.
Credit scores are used across the financial system to assess borrower risk. Equifax posted a 20% jump in U.S. mortgage revenue in the fourth quarter.
The company expects its annual revenue to be in the range of $6.66 billion to $6.78 billion, compared with analysts' average expectation of $6.59 billion, according to estimates compiled by LSEG.
After a prolonged slowdown driven by elevated interest rates, falling borrowing costs are reviving refinancing and origination activity in the U.S. mortgage market, creating demand for credit checks and risk assessments.
On a per-share basis, adjusted profit was $2.09 in the three months ended December 31, beating expectations of $2.05.
Executives said Equifax's data was protected by a "moat," shielding it from attempts by others to use AI to disintermediate the firm.
The comments came as global software stocks continue a selloff on worries that AI could disrupt business.
Equifax was last down 0.7%, reversing gains after the results.
(Reporting by Manya Saini in Bengaluru; Editing by Shreya Biswas)
((Manya.Saini@thomsonreuters.com; X: manya__saini;))
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