FICO drops 14.78% after FHFA decision allowing use of VantageScore

by MarketNewsData

Fair Isaac Corp. (FICO) sank –$275 (-14.78%) to $1,586.00 after a major policy update rattled investor confidence.

📉 What Happened:

  • According to CNBC, the Federal Housing Finance Agency (FHFA) said on X (formerly Twitter) that Fannie Mae and Freddie Mac will now allow lenders to use VantageScore 4.0 when evaluating mortgage applicants.
  • VantageScore, a competitor to FICO, is jointly owned by Equifax, Experian, and TransUnion.

🏦 Why It Matters:

  • The decision threatens FICO’s monopoly position in mortgage credit assessments, a highly profitable segment for the company.
  • Analysts fear it could reduce FICO’s revenue potential from government-backed mortgage originations.

📊 Market Reaction:

  • FICO shares plunged nearly 15%, marking one of their steepest one-day declines in recent memory.

🔍 Industry Context:

  • FHFA says the change is part of its effort to increase competition and expand access to credit.
  • The move could encourage broader lender adoption of VantageScore across the industry.

Takeaway:
FICO’s dominance in mortgage lending is facing new regulatory pressure. As reported by CNBC, FHFA’s statement on X may mark the start of a more competitive era in credit scoring.

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