TLDR
- FICO launched a new Mortgage Direct License Program allowing tri-merge credit report resellers to distribute scores directly to mortgage lenders
- The company introduced two pricing models: a performance model at $4.95 per score plus $33 per funded mortgage, or a flat $10 per score
- Barclays raised its price target to $2,400 from $2,000 and maintained an Overweight rating
- Needham maintained a Buy rating with a $1,950 price target
- Credit bureau stocks Equifax and TransUnion dropped over 7% and 10% respectively on the news
Fair Isaac Corporation stock jumped 24% in early trading Thursday after the company unveiled a new system that lets mortgage lenders access FICO credit scores directly. The move effectively cuts out the middleman in many transactions.

The FICO Mortgage Direct License Program allows tri-merge credit report resellers to distribute FICO Scores straight to mortgage lenders. This represents a change from the traditional distribution model that relied heavily on the three major credit bureaus.
Wall Street analysts reacted quickly to the announcement. Barclays raised its price target to $2,400 from $2,000 while maintaining an Overweight rating on the stock.
The investment bank called the direct licensing move “a clear positive.” Barclays pointed out that the new system effectively doubles mortgage pricing from $4.95 to $10 per score.
Needham maintained its Buy rating on FICO with a price target of $1,950. The firm stated the new program could be “substantially beneficial” for the company’s business.
New Pricing Structure
FICO rolled out two alternative fee models for the new system. The first option uses a performance-based approach.
Under this model, FICO charges a base royalty of $4.95 per score. The company then adds a $33 fee when a mortgage funded with a FICO-scored loan closes.
The second pricing option maintains a flat rate of $10 per score. This matches what resellers have historically paid through credit bureaus.
The dual pricing structure gives resellers flexibility in how they work with FICO. Lenders can choose the model that best fits their business operations.
Market Reaction
Retail sentiment on Stocktwits jumped to bullish from bearish territory. Message volume climbed to high from low levels within 24 hours.
The stock traded over 16% higher in premarket hours before opening even stronger. By early trading, shares had climbed 24%.
Credit bureau stocks took a hit on the news. Equifax dropped more than 7% while TransUnion fell over 10%.
The decline in credit bureau stocks reflects concerns about reduced dependence on their services. The new FICO program could redirect revenue away from these companies.
Stock Performance Context
FICO stock has declined 4% year-to-date. Over the past 12 months, shares have dropped more than 1%.
The company is a component of the S&P 500 index. Thursday’s rally represents a sharp reversal from recent trading patterns.
The new mortgage system is expected to streamline the mortgage process. Lenders will be able to access credit scores more directly.
This could provide more accurate credit assessments for borrowers. The system may also speed up loan processing times.
FICO’s direct distribution program represents a fundamental shift in how mortgage credit scores are delivered to lenders, with Wall Street viewing the $10 per-score pricing as a major revenue opportunity.