Isaac is fairthe creators of the FICO score won more than 20% stake on Thursday after unveiling a new pricing model that would allow mortgage lenders to bypass the credit department for credit scores.
Montana-based Data Analytics Company said it will license its credit scores directly to mortgage resellers. The score is used by nearly 90% of lenders to assess the borrower’s credit risk. FICO scores generally range from 300 to 850, with higher scores reflecting lower credit risk.
Fair Isaac’s Pop is the largest percentage increase since November 22nd. Stocks have fallen by about 9% this year.
Under the new plan, lenders have the option to choose between two pricing models. “This change will eliminate unnecessary markup of FICO scores and place pricing model options in the hands of people who use FICO scores to promote mortgage decisions,” Fair Isaac CEO Will Lansing said in the release.
Credit Bureau Stocks Experian, Trans Union and Equifax The company fell between 4% and 10% respectively as investors thought a fair Isaac announcement could reduce the importance of the business. Fair Isaac plans to offer both mortgage score pricing models to three credit departments under the same conditions.
Fair Isaac Stock Performance over the past year.
“The new pricing scheme offers lenders both a choice of pricing and distribution models. We believe the former will improve the economy of FICO, while the latter will ultimately become an intermediate credit bureau from 100% markup on the FICO score.”
Bill Palt, director of federal housing finance agency, said in X-Post Thursday morning that Fair Isaac’s moves demonstrate an effort to “create creative solutions to help American consumers.”
Pulte, who criticized fair Isaac in late July as a “monopoly” for raising the price of unfair credit scores, added: “We are encouraging the Credit Bureau to take similar creative and constructive actions, encouraging the market to be safer, stronger and more competitive.”
