FICO's stock falls as Fannie and Freddie deal the credit-score company a new blow

MW FICO's stock falls as Fannie and Freddie deal the credit-score company a new blow

By Emily Bary

The government-backed entities are embracing a rival type of credit score

FICO's stock was one of the S&P 500's chief decliners on Wednesday.

FICO's grip on the credit-score market may be cracking.

Shares of Fair Isaac (FICO), the company that created FICO scores, slid 6.4% on Wednesday after Fannie Mae and Freddie Mac both announced that they would start accepting an alternate type of credit score. FICO's stock was among the biggest S&P 500 SPX decliners Wednesday.

The two government-backed entities, which buy mortgages from lenders, are testing acceptance of VantageScore 4.0, a rival to FICO that's jointly owned by Equifax $(EFX)$, Experian (UK:EXPN) and TransUnion (TRU). The limited rollout will ultimately give way to "broader availability as the market moves forward with full implementation of modernized credit scoring and credit reporting," Fannie Mae said in a statement.

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"New credit-score options reinforce competition and innovation," the statement said.

Some consumer advocates, however, have questioned whether a greater embrace of VantageScore 4.0 will achieve policymakers' stated goals of reining in credit-scoring costs. Michelle Young, previously a senior advisor at America's Homeowner Alliance, wrote on LinkedIn earlier this week that the credit-reporting agencies that own VantageScore are a "cartel dressed up as competition."

The latest changes at Fannie and Freddie dovetail with a broader move by the Trump administration to shake up the existing credit-scoring model. William Pulte, the director of the Federal Housing Finance Agency, said in a statement that "more predictive models" will help "millions of Americans who responsibly pay rent qualify for mortgages."

The Mortgage Bankers Association, which represents the real-estate finance sector, applauded the move, saying that it would "help foster a more transparent and dynamic market, broaden access to sustainable credit and put downward pressure on costs" for borrowers.

Equifax, Experian and TransUnion recently cut their prices for VantageScore credit reports.

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-Emily Bary

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April 22, 2026 16:03 ET (20:03 GMT)

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