This article first appeared on GuruFocus .
Fair Isaac Corporation ( NYSE:FICO ) fell 15.63% intraday after Federal Housing Finance Agency Director Bill Pulte directed Fannie Mae and Freddie Mac to approve all lenders to use VantageScore, effective immediately. The pilot had been capped at 50 lenders. "FICO has enjoyed a monopoly. No more," Pulte said. Equifax ( NYSE:EFX ) shares dropped 6.65% and TransUnion ( NYSE:TRU ) 6.83% .
Shares had already slipped in April, when the two government-sponsored enterprises first began accepting mortgages scored with VantageScore 4.0. FICO shares are down more than 44% year to date.
Pulte expanded VantageScore even as he criticized the three credit reporting agencies that own it. In a separate post, he said Equifax, Experian and TransUnion have been overcharging Americans for far too long, that this will end soon, and that the agency is seriously considering bi-merge and stronger solutions. VantageScore was founded in 2006 and is jointly owned by the three. The Trump administration says it intends to lower costs for homebuyers and boost competition in a market FICO dominates. Trump signed the Credit Score Competition Act in 2018, directing the agency to enable Fannie and Freddie to approve more advanced scoring models.
