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FICO’s Revenue Dependence On Credit Bureaus Reaches 60% As Their Mortgage Rival Gains Access

Scores delivered a 90% segment operating margin in fiscal 2026, while unfinished mortgage-pricing agreements kept 2027 guidance on hold.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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FICO’s Revenue Dependence On Credit Bureaus Reaches 60% As Their Mortgage Rival Gains Access

Fair Isaac, which sells analytics software and the FICO credit score used by lenders, drew 60% of revenue in fiscal 2026 from Experian, TransUnion and Equifax—the owners of competing score VantageScore. The annual report filed Friday puts that growing dependence alongside broader regulatory acceptance of the rival in mortgages and says the announcements have already hurt FICO’s stock price.

Customers With A Competing Score

The bureaus’ share of FICO revenue was 51% in 2025 and 45% in fiscal 2024. Each bureau individually supplied more than 10% of total revenue in each of those fiscal years and fiscal 2026.

That makes the bureaus both important customers and owners of an alternative to FICO’s product. FICO typically licenses its business-to-business scoring models to consumer reporting agencies and collects royalties tied to usage. The agencies jointly own VantageScore, whose mortgage-market access has expanded through announcements by the Federal Housing Finance Agency.

For Fannie Mae and Freddie Mac mortgages, the agency’s July 2025 announcement opened scoring to lender choice between FICO and VantageScore. An April 2026 announcement provided for acceptance of VantageScore from approved lenders; the September 2026 announcement extended that to all lenders.

FICO says its stock declined significantly in the months following the housing agencies’ announcements. The company also warns that greater use—or perceptions of greater use—of VantageScore could lead to further declines, while cautioning that relative adoption of the scores is difficult to predict.

FICO shares fell about 3% to $683.45 in Friday trading. Its market value was $15.3 billion in Friday trading. That session’s decline is separate from the longer-running pressure FICO describes; the annual report is not established as its cause.

The Economics Behind The Exposure

Scores generated 65% of FICO’s fiscal 2026 revenue, compared with 59% in fiscal 2025 and 54% in fiscal 2024. The business therefore became a larger part of the company as dependence on the bureaus increased.

Fiscal 2026 Scores revenue reached $1.7 billion, up 41% from fiscal 2025. FICO attributes the increase in business-to-business scoring revenue primarily to higher prices and greater mortgage-origination score volume over the full year.

The Scores segment’s operating margin reached 90%, versus 88% in fiscal 2025. That measure excludes unallocated corporate expenses, stock-based pay, restructuring charges and other costs; it is not the companywide profit margin.

Software supplies a different set of products: tools for fraud detection, loan origination, customer management and marketing, delivered through cloud subscriptions or customers’ own systems, plus professional services. Fiscal 2026 Software revenue rose 7%, while its segment operating margin fell to 28% from 30%. FICO attributes that margin decline primarily to higher third-party data-center hosting costs and fewer sales of higher-margin software recognized upfront.

Those results leave Scores with both faster revenue growth and a higher segment margin than Software. Across FICO, fiscal 2026 revenue rose 27% to $2.5 billion.

Higher Prices, Unfinished Agreements

The mortgage-pricing transition had already led FICO to withhold fiscal 2027 guidance in Wednesday’s earnings release. The company cited customer-specific pricing arrangements still being negotiated and uncertainty about the mortgage market.

The fourth-quarter results show why price and volume need to be kept separate. Business-to-business Scores revenue rose 39% from the year-earlier quarter, mainly because mortgage-score unit prices increased. Mortgage-origination volume declined, partially offsetting that benefit—unlike the full-year volume increase described in the annual report.

Fourth-quarter Scores revenue rose 33% to $413.8 million. FICO said elevated interest rates and affordability problems were keeping mortgage originations below historical norms.

FICO’s Preferred Program already had announced deals, and the company was working on other pricing programs covering calendar 2027. The unfinished agreements, rather than the reported fourth-quarter growth alone, shaped management’s decision to hold back its forecast.

A Route Around The Bureaus

FICO is also changing distribution. Bypassing the nationwide bureaus is the aim of its Mortgage Direct License Program, announced in fiscal 2026.

FICO Score 10T has its own path into mortgages. More than 70 mortgage lenders can access it without an additional fee when they have paid for Classic FICO. Fannie Mae and Freddie Mac supplied evaluation data on July 1, 2026, following April 2026 approval.

LoanPASS and Optimal Blue have integrated the newer score. These distribution and implementation efforts sit alongside the expanding permission for lenders to use VantageScore, rather than eliminating that competitive choice.

Beginning January 1, 2027, FHA-insured mortgages will permit both VantageScore and FICO Score 10T alongside Classic FICO, under the Department of Housing and Urban Development’s April 2026 announcement.

Sources

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