Credit Score Price Increases: Understanding the Real Drivers

Recent industry chatter has sparked confusion about the rising costs of FICO credit scores in mortgage lending. To set the record straight, the National Consumer Reporting Association (NCRA) recently issued a statement explaining the reasons behind these price hikes—and what they mean for mortgage professionals.

Here’s what you need to know:

1. FICO Royalties Are Increasing: On November 6, 2024, FICO announced its third consecutive annual royalty increase for credit scores. This wholesale cost increase is passed to the national consumer reporting agencies (the Bureaus).
2. Bureaus Add Margins: In addition to FICO’s fees, the Bureaus add their own margins to credit score pricing and credit data costs.
3. Resellers Are Not the Source of the Increases: Resellers like Birchwood Credit Services must pass along these costs due to contracts with the Bureaus but remain competitive by minimizing markups.

Would You Like to Avoid This Year’s Price Increase?

Book a 15-minute call with us today to learn how to lower your net credit expenses by increasing compliant cost recovery. Schedule a Call Now!

The Bigger Picture

The reseller market has faced significant consolidation, shrinking from over 300 companies two decades ago to about 30 today. Despite this, resellers continue to prioritize competitive pricing, innovative technology, and excellent service to mortgage lenders.

Advocating for Transparency

The NCRA has reaffirmed its commitment to fairness and transparency, advocating for FICO and the Bureaus to address the lack of clarity surrounding pricing structures.

What This Means for You

At Birchwood Credit Services, we are committed to helping you navigate these challenges. Whether it’s pricing clarity, tri-merge reports, or seamless integrations, we’re here to support your business. Reach out today to see how we can streamline your credit processes and drive real results.