FICO stock falls 14% after Pulte pledges 'more action' on credit score competition

Fair Isaac Corporation ( FICO ) stock dropped more than 13% on Monday after Federal Housing Finance Agency Director Bill Pulte said the agency was focusing on mortgage credit score competition.

"We are taking more action this week to ensure competition is real and not fake, or manipulated," Pulte posted on X , referring to a news story about FICO's decision to hold the price for preferred mortgage lenders to use its score at $10.

Investors and analysts viewed FICO's decision to hold prices flat after several years of hikes as a defensive move to help the company maintain its market share in the face of new competition . A stock slide that started earlier Monday accelerated after Pulte's post.

For decades, FICO was the primary credit score provider for the mortgage industry, and in recent years, the company dramatically hiked prices for its credit scores. As recently as 2022, a single FICO score cost less than $1, but by last year, the company was charging $10 for a two-score bundle.

This year, in a bid to stoke competition, the FHFA began allowing mortgage lenders to use VantageScore , which is provided by credit bureaus Equifax, Experian, and TransUnion, for conventional mortgages bought by Fannie Mae and Freddie Mac. A single VantageScore costs around $0.99.

Pulte has made credit score pricing a focus for his agency and has been a vocal critic of FICO's pricing practices. In addition to allowing VantageScore for conventional mortgages, he simplified the credit score pricing process for Fannie Mae- and Freddie Mac-eligible loans.

Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.