Overview

U.S. Director of Federal Housing Bill Pulte announced that, effective immediately, the government‑sponsored enterprises Fannie Mae and Freddie Mac are instructed to approve the VantageScore credit‑scoring system for all lenders. In his X post, Pulte wrote, “Fannie and Freddie’s initial rollout of VantageScore has been incredibly successful, with 50 lenders delivering loans. So, effective immediately, I’m instructing Fannie and Freddie to approve all lenders to use VantageScore,” and added, “FICO has enjoyed a monopoly. No more.”

Market Reaction

Following the directive, equity prices of the three major U.S. credit‑scoring firms fell sharply on Friday morning: Fair Isaac Corporation (FICO) dropped 6%, Equifax (EFX) fell 6%, and TransUnion (TRU) slid 3.07%. The London‑listed Experian (EXPN) also declined, shedding 3.7%.

Prior Context

FICO’s shares had already slipped in April after Freddie Mac and Fannie Mae announced they would accept mortgages assessed using the rival VantageScore 4.0 model.

Additional Comments from Pulte

In a separate X post, Pulte accused the three credit‑reporting agencies—Equifax, Experian and TransUnion—of “overcharging Americans for far too long.” He indicated that the administration is “seriously considering bi‑merge, and stronger solutions (SAFER and SOUNDER)” and vowed not to allow companies to exploit American consumers.

About VantageScore

VantageScore, founded in 2006, is a credit‑score modeling and analytics company jointly owned by Equifax, Experian, and TransUnion. The Trump administration cites the 2018 Credit Score Competition Act, signed by President Donald Trump, as the legislative basis for directing the Federal Housing Finance Agency to enable Freddie Mac and Fannie Mae to approve more advanced credit‑score models for mortgage underwriting, with the stated goal of lowering costs for homebuyers and increasing competition in a market historically dominated by FICO.

Implications

The directive represents a regulatory shift aimed at broadening the use of alternative credit‑scoring models in mortgage underwriting, potentially increasing competition among scoring agencies and altering the pricing dynamics for U.S. home loans.