On Monday, September 28, at 4:35 p.m. New York time - after the close - Bill Pulte, director of the Federal Housing Finance Agency (FHFA), published a post on X. The next day Fair Isaac, the company behind the FICO credit score, lost 26.5% of its value.
The post dealt with something that sounds technical: a pricing grid. To understand why it erased a quarter of the company's value in a day, you need to understand how FICO makes money.
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What Pulte announced
Fannie Mae and Freddie Mac - the two government-supervised mortgage companies that buy a large share of conventional US mortgages - price each loan from a grid. The borrower's credit score is one of its main axes: a higher score, a lower price add-on.
Until this week there were two paths to a score. Since September 9 all approved lenders have been allowed to use VantageScore 4.0, FICO's competitor, but according to reports in the mortgage market, a VantageScore score carried a 20-point downward adjustment before entering the grid. In other words, it was allowed, but at a discount.
Pulte's announcement removes that: one grid, with VantageScore joining the classic FICO. In his words, two separate grids "make zero sense," and the change follows feedback from lenders and consumers.
And what is still unknown: according to reports, the combined grid itself and its implementation date have not yet been published.
The stock
| Close | Change | |
|---|---|---|
| High, July 29 | 1,373.08 | |
| August 31 | 1,147.21 | |
| September 14 | 1,001.50 | |
| September 28 - day of the announcement | 840.89 | |
| September 29 | 617.87 | -26.52% |
| September 30 | 592.47 | -4.11% |
| October 1 | 661.85 | +11.71% |
| September as a whole | -48.4% | |
| From the July high | -56.9% |
Prices in dollars, from Yahoo Finance trading data.
On October 1 the stock recovered part of the drop, with no new announcement from the company or the agency. About 4.9 million shares traded on September 29, roughly 12 times the average of the previous two weeks. And note the top rows: before the announcement the stock had already lost about 39% from its July high, in a slide that accelerated with the September 9 decision.
How FICO makes money
Fair Isaac's latest quarterly report, for the quarter ended June 30, 2026, explains the sensitivity.
| Quarter ended June 30, 2026 | Revenue | Year-on-year change |
|---|---|---|
| Total revenue | $674.2 million | +26% |
| Scores segment | $458.9 million | +41% |
| of which: business-to-business scores | $400.0 million | +49% |
| of which: business-to-consumer scores | $58.9 million | +5% |
| Scores segment operating margin | 91% | from 88% |
Source: Fair Isaac's quarterly report to the SEC.
Two things stand out. First: the Scores segment is 68% of revenue, and every dollar of revenue in it leaves 91 cents of operating profit. That is the company's profit engine; the software it sells is the smaller part.
The second is the source of growth. According to the company itself, the increase in business-to-business scores revenue came mainly from a higher price per mortgage score - not from more scores. In other words, recent growth rested on pricing power.
And according to reports, that price doubled in 2026: from $4.95 per score to $10. Against it, TransUnion announced on September 29 that it will keep selling a VantageScore 4.0 mortgage score for $0.99 through the end of 2028.
That is the link to the single grid. As long as a VantageScore score is priced with a 20-point adjustment, a lender has a reason to keep paying for FICO. When the scores enter the same grid without an adjustment, the price difference becomes the main consideration.
And why the competitors fell too
Here is a detail that looks contradictory. VantageScore is jointly owned by the three credit bureaus - Equifax, Experian and TransUnion. One might have expected them to benefit from the decision.
| 9/14 | 9/30 | Change | |
|---|---|---|---|
| Equifax | 172.29 | 137.24 | -20.3% |
| TransUnion | 78.83 | 61.12 | -22.5% |
| Fair Isaac | 1,001.50 | 592.47 | -40.8% |
Closing prices in dollars, from Yahoo Finance trading data.
They fell, though at half FICO's pace. The explanation is not in the announcement, but the structure hints at it: the bureaus are also distributors of FICO scores, and together the three accounted for 63% of Fair Isaac's revenue last quarter. When the price of a score falls, part of the money that flows through them falls too. And $0.99 per score is not a price built to replace that revenue - it is a price built to win market share.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
What interests me here is that the market did not price the announcement itself, but the end of a monopoly.
FICO enjoyed for years a position that is hard to find elsewhere: a score the whole system was bound to, and a price it could double. A 91% margin is not the result of a good product alone - it is the result of having no alternative. The single grid does not kill FICO; it removes the reason to pay ten times as much for it.
But it is worth separating the direction from the details. The grid itself has not been published, the implementation date is unknown, and lenders do not switch systems overnight. What changed on Tuesday is expectations, not revenue - and revenue will show only in the coming reports.
The detail I notice most is the bureaus. When even those who should benefit from the change fall, it is a sign the market does not see a transfer of profit from one player to another, but a fall in the price of every credit score in a mortgage. And that is a question about the whole industry, not one company.
(To be clear: this is my personal opinion only, and nothing here is a recommendation to take any action.)
Ilan Abramov, the author, or anyone on his behalf may hold some of the securities or funds mentioned in this article.
