FICO, a leader in global analytics software, is launching the FICO Mortgage Direct License Program, marking a major shift in the delivery of FICO Scores to the mortgage industry.
With this new program, tri-merge resellers have the option to calculate and distribute FICO Scores directly to their customers, eliminating reliance on the three nationwide credit bureaus. This change is designed to drive price transparency and create cost savings for mortgage lenders, mortgage brokers, and other industry participants.
Under the new performance model, the royalty fee for the FICO Score will be $4.95 per score, which represents a 50 percent reduction in average per score fees to the tri-merge resellers. This comes from eliminating credit bureau mark-ups. Further, 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.
“Today marks a turning point in how credit scores are delivered and priced across the mortgage industry,” Will Lansing, CEO of FICO, said. “Direct licensing of the FICO Score brings transparency, competition, and cost-efficiency to the mortgage lending process. This change eliminates unnecessary mark-ups on the FICO Score and puts pricing model choice in the hands of those who use FICO Scores to drive mortgage decisions.”
FICO will also offer both FICO mortgage score pricing models to the three nationwide credit bureaus on the same terms.
The FICO Score continues to be the cornerstone of the consumer lending ecosystem, used by 90 percent of top U.S. lenders to make consistent, fair, and informed credit decisions.
FICO’s new program aligns with calls from policymakers and industry leaders to modernize credit infrastructure and promote affordability, liquidity, and access in the mortgage industry.