Fair Isaac (NYSE: FICO) stock rallied sharply on Thursday after the company announced a new direct-to-lender licensing program.

The new program cut down the hassle for mortgage lenders and resellers by offering them the ability to license FICO credit scores without going through the major credit bureaus.

The development triggered a notable surge in FICO stock prices, which were trading 24% up at $1,873 at press time.

FICO stock: What’s really driving the shares?

A leader in credit scoring and analytics, Fair Isaac Corp. unveiled the FICO Mortgage Direct License Program on October 1, 2025.

This initiative allows tri-merge resellers, entities that traditionally obtain scores from all three major credit bureaus, to calculate and distribute FICO scores directly to mortgage lenders and consumers.

By bypassing the bureaus, FICO aims to eliminate the markups imposed by these intermediaries.

Under the new program, FICO will charge a reduced fee of $4.95 per score alongside a $33 loan closure fee, representing about a 50% reduction from the average pricing previously charged to tri-merge resellers.

Lenders who prefer to stick with the old system can still do so, paying the familiar $10 per score.

What’s new is that FICO is extending its updated pricing options directly to the credit bureaus as well, giving them access under the same terms.

The catch, though, is that FICO can’t control whether those bureaus tack on extra markups when they pass the scores along to their own customers.

FICO stock’s rally on Thursday also had a flip side as a sharp selloff was seen in the credit bureaus: Equifax slid roughly 11%, TransUnion dropped about 9%, and Experian was down around 6%.

Investors saw the shift as a direct challenge to the long-standing system where credit scores are packaged with bureau services.

What analysts say?

Barclays quickly weighed in, lifting its price target on FICO from $2,000 to $2,400, a 20% bump, while keeping an “Overweight” rating, which means investing in this stock will likely generate good returns in months to come.

The firm said the new licensing model could boost margins by cutting out the middlemen and open up a larger market by going straight to lenders.

Citigroup analysts took the other side of the equation, warning that credit bureaus may see slimmer profits since FICO scores make up a big slice of their mortgage-related revenue.

Others on the Street suggested bureau fees could come under pressure, forcing those companies to consider defensive moves to protect their business.

FICO’s move marks a significant shake-up in how credit scores are distributed, particularly in the mortgage market, where tri-merge reports have long been the norm.

By cutting costs and offering more transparent pricing, the company is positioning itself to capture more value from its core product. For the credit bureaus, though, this threatens some of their most profitable revenue lines.

That said, the bureaus still control consumer credit data and the broader reporting infrastructure, advantages that could soften the long-term impact of FICO’s challenge.

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