American homebuyers are about to see their borrowing costs rise as credit scoring company FICO hikes the fees it charges to pull credit scores and reports for home loan applications.
Mortgage lenders are reporting price increases of up to 50% for 2026 for credit score pulls, the fourth consecutive year of price jumps for the tri-merge credit reports required for most mortgage applications.
This comes after FICO announced a new direct-to-reseller licensing approach it claimed would save lenders up to 50% on per-score fees by going around the three major credit bureaus. This would add $99 in fees for each loan closed to the mortgage.
FICO licenses the personal and financial data generated by the nation’s three major credit bureaus—Equifax, Experian and TransUnion—to generate consumer credit scores. Under the existing setup where lenders get FICO scores from the credit bureaus, FICO is doubling its price from $4.95 to $10 per score.
In both models, lenders and consumers are paying more no matter what, industry experts say. And mortgage lenders are not having it.
Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA), didn’t hold back in recent criticism of FICO’s price hikes.
“Once again, the national credit bureaus are abusing their government-granted oligopoly by gouging consumers,” Broeksmit said in a statement. He called it “a predictable outcome in a flawed, outdated and anticompetitive system where lenders are required to buy specific, increasingly expensive credit reporting data from each of the three credit bureaus.”
Credit bureaus are calling foul, too. Equifax took FICO to task in a statement for “flexing its monopoly pricing power.”
“(FICO’s) announcement was inaccurately positioned as a cost savings, when it will actually end up costing consumers and the mortgage industry much more,” Equifax stated. “This monopoly-like 2x price increase has the potential to raise mortgage score costs across the industry by approximately $100 million.
“This is a continuation of FICO’s established pattern of aggressive pricing actions from their historical sole source position in the Mortgage space—with pricing increases made at a CAGR of 150% over the past four years.”
Tri-merge requirement piling on costs for lenders, consumers
The key problem with soaring credit report costs is a longstanding requirement for mortgage lenders to obtain credit scores and reports from all three credit bureaus. This “tri-merge” pull applies to all loans submitted to Fannie Mae and Freddie Mac (the quasi-government agencies that back most conventional loans) and to government-backed mortgages.
While the tri-merge report has been standard practice for many years, critics argue it creates an artificial monopoly that eliminates competitive pricing.
Plus, the tri-merge fees add up fast for lenders because not all loan files they pull credit reports for get to the closing table, explains Jon Overfelt, director of sales with American Security Mortgage Corporation in Charlotte, North Carolina.
“If I take 10 loan applications, two of them are going to close,” Overfelt said, noting that loans may not close because consumers are shopping around with different lenders, the deal falls through due to inspection or appraisal issues, or the loan doesn’t get approved.
Whatever the reason, a tri-merge credit report still has to be pulled for each loan file—and someone has to pay the fee, he added.
“We have an average closing rate of about 23% for the industry, give or take, from credit pull to funding, so you’re eating a phenomenal amount of cost,” Overfelt said of lenders.
What happens next?
The Federal Housing Finance Agency (FHFA) recently directed Fannie and Freddie to include credit scores generated by the VantageScore 4.0 model, FICO’s sole competitor that’s owned by the three credit bureaus.
The move, championed by FHFA Director Bill Pulte, was meant to encourage price competition and broaden mortgage credit access to more Americans; VantageScore takes rent payments and other alternative credit data into consideration. But Fannie and Freddie haven’t yet adopted the newer model as they work to hammer out guidelines. Plus, most lenders still use FICO.
The MBA’s Broeksmit noted that the government-mandated credit score purchasing arrangement is unique to mortgages. Nearly every other financial product, from auto loans to credit cards, relies on single-file credit reports.
That’s why the MBA is pushing the FHFA to allow mortgage companies to use a single-pull credit report and abandon the tri-merge requirement.
“Single-file reports are used safely in nearly every other consumer finance market,” Broeksmit said. “Extending them into the mortgage market would provide price relief for American homebuyers by injecting real competition, lowering closing costs and streamlining the mortgage process, all without compromising sound risk management.”
Some in the industry have suggested that lenders simply charge consumers upfront for credit reports. However, most lenders don’t want to do that, especially in the current environment where affordability pressures are already sidelining so many borrowers, Overfelt said.
With some lenders estimating average per-loan credit report and score fees to reach $300 or more next year, charging borrowers upfront would likely discourage them from shopping around for a mortgage. And that might mean they won’t get the right loan for their needs or may pay more in interest long term.
“(Lenders) are not going to want to discourage the borrower,” Overfelt said. “But the only other option is then they end up eating all those costs. And it’s probably your third or fourth biggest cost on your (profit and loss statement).”
