It’s official! FICO raises score price to $4.95 for mortgage lenders

Fair Isaac Corp. (FICO), the company that retains the rights to the market’s widely adopted consumer credit-risk assessment methodology, announced on Wednesday that it has increased its wholesale royalty from $3.50 to $4.95 per score for mortgage originators.

“At this new per-score royalty, the amount collected by FICO will remain a small percentage of the cost of the tri-merge credit report and score bundle (on average approximately 15% of the $80 to well over $100 tri-merge bundle cost), which is itself an exceedingly small share of overall mortgage closing costs,” Jim Wehmann, FICO executive vice president, wrote in a blog post.

Wehmann added that, after the change, “FICO’s share will remain only approximately two-tenths of one percent” of the total average closing costs of $6,000.

In the blog post, Wehmann claimed there was “misinformation” stirring around the Internet regarding the fee hikes, referred derisively as “price gouging” and “junk fees.”

“At $4.95 per score, the royalty collected by FICO for mortgage is entirely fair and reasonable, particularly considering the significant benefits it brings to the industry,” he said, adding that the new royalty is only the fourth royalty change in the mortgage industry in 30 years.

“Importantly, after our upcoming royalty change, all amounts above $4.95 per score are collected and retained by the credit bureaus or their tri-merge resellers—not FICO. This means, after this change, any price increase greater than $1.45 per score is solely due to prices set by others who sell and distribute the scores.

Analysts and mortgage executives expected an increase from FICO after the election. But the bets were at a higher level, at $5. However, the credit bureaus—TransUnion, Experian, and Equifax—were notified about the changes on Oct. 30, when they started communicating with some clients. 

That’s the third straight year of increases in FICO scores, which has received criticism from the industry. The royalties rose to $0.50 to $0.60 per FICO score in 2018.

In 2023, a tier-based structure of $0.60 to $2.75 per score was implemented, which increased prices for some lenders by up to 400%.

After complaints from lenders, FICO returned to a fixed royalty of $3.50 per FICO score in 2024. But it collected the same per-score price for soft pulls and hard pulls.

These moves come as Fannie Mae and Freddie Mac move away from the current Classic FICO credit score model. They will require lenders to use two credit scores generated by the FICO Score 10 T and the VantageScore 4.0 models, which are considered more inclusive than their predecessors.