TransUnion fires latest volley in credit-score price war

Core Viewpoint - TransUnion has significantly reduced the price of its VantageScore 4.0 mortgage origination metric to $0.99, down from $4, as part of a competitive strategy in the mortgage scoring market [1][2][4]. Pricing Strategy - The new price of $0.99 represents a 75% reduction from the previous price of $4, which was already a 50% discount from earlier pricing [2]. - TransUnion continues to offer VantageScore 4.0 for free to lenders who purchase a FICO score [2]. Market Context - This price reduction is part of a broader price war in the mortgage scoring market, influenced by the Federal Housing Finance Agency (FHFA) and its director Bill Pulte, who advocates for scoring modernization and increased competition among providers [4][5]. - FICO scores have traditionally been required by Fannie Mae and Freddie Mac for loan sales, but VantageScore was created as an alternative by TransUnion, Experian, and Equifax [6]. Competitive Landscape - Experian has recently increased its mortgage credit report costs by approximately $3 per borrower, while Equifax has previously reduced the price of VantageScore 4.0 to just over $4 [7][8]. - FICO has raised its score pricing for mortgages to $10 from $4.95, indicating a trend of increasing costs among traditional score providers [8]. Future Considerations - TransUnion's pricing strategy for VantageScore 4.0 will be continuously evaluated over time [9]. - The FHFA is exploring a "lender choice" model that may allow for the use of either VantageScore or FICO in future scoring modernization efforts [13].