FICO Shares Slide as Fannie Mae and Freddie Mac Approve Alternative Credit Scores Fannie Mae and Freddie Mac have announced they will start accepting mortgages assessed using VantageScore, a rival credit scoring model, marking a significant shift in the U.S. Mortgage lending landscape. The decision, revealed on April 22, 2026, sent shares of Fair Isaac Corporation (FICO) lower, with the stock declining as much as 12% in intraday trading. The move by the two government-sponsored enterprises, which back approximately half of all U.S. Mortgages, ends their long-standing reliance on FICO scores as the sole credit scoring model used in mortgage underwriting. For decades, Fannie Mae and Freddie Mac have required lenders to use FICO scores when selling loans to them, giving Fair Isaac a dominant position in the credit scoring industry. VantageScore, developed jointly by the three major credit bureaus—Equifax, Experian, and TransUnion—has gained traction in recent years as an alternative to FICO. The model uses a different algorithmic approach to assess creditworthiness, incorporating factors such as trended data and machine learning techniques. Proponents argue it offers greater inclusivity, particularly for consumers with limited credit histories. Industry analysts noted that the decision reflects broader efforts to modernize credit scoring practices and increase competition in the market. The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, has been evaluating alternative credit scoring models as part of its commitment to promoting fair and equitable access to credit. Fair Isaac Corporation acknowledged the announcement in a statement, emphasizing its ongoing innovation in credit scoring technologies and its work with regulators to ensure its models meet evolving standards. The company highlighted its recent developments, including the FICO Score 10 Suite, which incorporates alternative data and is designed to improve predictive power even as maintaining consistency with prior versions. The shift could have lasting implications for Fair Isaac’s market position, particularly if other lenders and investors follow the lead of Fannie Mae and Freddie Mac in adopting VantageScore or other emerging models. However, FICO scores remain widely used across multiple lending sectors, including auto loans, credit cards, and personal loans, where the company continues to hold significant influence. As the mortgage industry adapts to this change, stakeholders will monitor how the dual acceptance of FICO and VantageScore affects loan pricing, approval rates, and access to credit for underserved populations. The development underscores the growing importance of innovation and competition in the credit scoring ecosystem.
9