Equifax Sees Bigger Profits As Mortgage Credit Scores Shift

Equifax is positioned to earn higher profits from mortgages because competition in credit scoring is shifting business away from FICO and toward cheaper VantageScore products that Equifax sells, while mortgage volumes are starting to recover.

What is changing in mortgage credit scores

• The Federal Housing Finance Agency (FHFA) is moving Fannie Mae and Freddie Mac from the old Classic FICO model to a new framework that allows both FICO 10T and VantageScore 4.0 for mortgage lending.

• FHFA is also implementing a “bi‑merge” approach (using reports from two of the three bureaus instead of all three) around the fourth quarter of 2025, changing how often and from whom lenders buy mortgage credit data.​

How this benefits Equifax

• Equifax jointly owns VantageScore with Experian and TransUnion, so every time lenders choose VantageScore 4.0 instead of a FICO score, Equifax captures high‑margin score revenue on top of traditional credit‑report fees.

• Equifax has committed to offer VantageScore 4.0 mortgage scores at about $4.50—more than 50% below FICO’s 2026 mortgage score price—through at least 2027, and is even giving VantageScore scores free to customers who buy FICO scores through 2026, which is intended to accelerate lender adoption.

Why FICO’s pricing helps Equifax

• FICO has announced it will more than double its 2026 price for mortgage scores, from about $4.95 to $10 per score, and add a “Mortgage Direct License” fee that Equifax estimates could increase industry score costs by roughly $100 million per year.​

• Equifax argues this aggressive pricing will push lenders to seek cheaper alternatives; by undercutting FICO and bundling VantageScore with existing services, it expects increased VantageScore usage and therefore more score‑related profit.

Evidence of growing mortgage profit

• In recent mortgage updates, Equifax’s U.S. mortgage revenue has risen as higher‑rate headwinds ease and lenders run more credit and income checks, leading to around 20% growth in U.S. mortgage revenue in one recent period as the market recovered.

• Analysts estimate that if mortgage activity stays near current 2025 levels, Equifax’s mortgage‑score strategy could add on the order of $100–200 million of annual profit as volumes normalize or grow.​

What it means for borrowers and lenders

• For lenders, the new competition gives leverage to negotiate lower per‑file fees and potentially lower overall mortgage‑credit‑reporting costs, especially as tri‑merge infrastructure remains in place and VantageScore is permitted but not mandated.

• For consumers, wider use of VantageScore 4.0—which incorporates more modern data and can include things like rental and utility histories—could expand the pool of borrowers who qualify and slightly reduce the embedded cost of credit scores in mortgage pricing.