FICO is moving away from a single flat fee for mortgage origination credit scores toward pricing tailored to individual customer needs, the report said. The shift comes as FICO faces greater competition from VantageScore, which received approval for use by government-backed mortgage lenders. The company said the transition makes it difficult to provide a financial outlook for the coming fiscal year.
FICO saw fiscal fourth-quarter net income of $175 million, or $8.12 per share, compared with $155 million, or $6.42 per share, in the year-ago period, according to a Nov. 4 press release.
Results included a $65 million accrual for a proposed settlement of an antitrust lawsuit involving FICO’s credit score business, a $48 million nonoperating gain from the sale of an equity investment and a $27 million restructuring charge related to layoffs, the release said.
FICO said in October that it planned to reduce its workforce by approximately 15%, according to the WSJ report.
Excluding those items, adjusted earnings were $11.10 per share, exceeding the $10.69 analysts expected, the report said, citing FactSet.
Revenue increased 27% to $657 million, topping the $651.7 million consensus estimate, according to the report. Sales from FICO’s credit score business rose 33%, while its business-facing scores segment recorded a 39% increase. Higher mortgage origination score prices helped drive that growth despite a decline in mortgage originations.
FICO said the housing market’s continued weakness is keeping mortgage lending activity below historical levels, adding pressure to a business already navigating changes in its competitive and pricing environment, the report said.
FICO’s pricing changes came amid scrutiny from Washington. In March, Sen. Josh Hawley of Missouri said he was investigating the company’s mortgage credit score pricing and urged the Federal Trade Commission to examine its practices, PYMNTS reported March 24. Hawley said FICO had increased its wholesale royalty on mortgage origination scores from 60 cents to $10 over five years, including a doubling of the per-score price to $10 in 2026. He argued that the increases disproportionately burden first-time homebuyers, who can undergo multiple credit checks while seeking a mortgage.
