FICO announces platform to deliver Scores directly to customers

FICO (FICO) last night announced a shift in the delivery of FICO Scores to the mortgage industry. The company launched the FICO Mortgage Direct License Program, giving tri-merge resellers the option to calculate and distribute FICO Scores directly to their customers, “eliminating reliance on the three nationwide credit bureaus.” FICO explains, “This shift will drive price transparency and immediate cost savings to mortgage lenders, mortgage brokers, and other industry participants.” FICO is introducing two alternate pricing models. Under the new performance model, the royalty fee for the FICO Score will be $4.95 per score, which represents a 50% reduction in average per score fees into the tri-merge resellers. A funded loan fee of $33 per borrower per score will apply when a FICO-scored loan is closed. The funded loan fee replaces fees previously charged for re-issue of FICO Scores, enabling broad use by participants in the originating market. Alternatively, lenders may opt to continue using the current per score only pricing model, which maintains a $10 per score fee into the tri-merge resellers, the average price previously charged by credit bureaus for the FICO Score. Shares of credit bureaus Equifax (EFX), TransUnion (TRU) and Experian (EXPGY) are moving lower following FICO’s announcement.