Julie May, vice president and general manager of B2B scores at FICO, said they are concerned that the introduction of VantageScore now puts the entire credit decision process into the hands of the three credit bureaus.
“It’s handing complete pricing power to Equifax, Experian, and TransUnion,” May told Mortgage Professional America. “They own VantageScore. It’s a de facto monopoly. If anyone thinks they’re going to lower pricing in the long term, it’s just mistaken. They’re going to have all the power.
“And they’re effectively going to be able to control, not just VantageScore and the credit report pricing, but they’re going to be able to actually control FICO score and squeeze us out of the market. There will eventually be no choice in this market because they act as a de facto monopoly.”
Credit pull pricing concerns
May and FICO have heard the complaints made by many in the mortgage industry about the rising costs of credit report pulls. However, they believe the ire for the rise in credit report costs should be directed at the three bureaus.
“We are transparent about what we price, and nobody else in the ecosystem is,” May said. “We charge $4.95 as a royalty fee for the FICO score. And that’s where the transparency starts and ends in terms of the approximately $120 credit report costs. If it’s a tri-merge, of that $120, we’re $14.85. So the vast majority, 85% of that cost, is not coming to FICO.”