Equifax will keep its $1 VantageScore 4.0 price in place through the end of 2027 as it pushes mortgage lenders to adopt the alternative credit score model, CEO Mark Begor told investors.
The initiative was first launched in March, when the company also continued to offer free VantageScore 4.0 credit scores to mortgage, automotive, card and consumer finance customers who purchase FICO scores.
The Federal Housing Finance Agency (FHFA) activated the usage of VantageScore 4.0 in April for more than 20 mortgage lenders, when the U.S. Department of Housing and Urban Development (HUD) signaled future adoption.
“While the vast majority of these mortgage lenders have begun using VantageScore, we have also seen a groundswell of VantageScore adoption with about 1,200 additional mortgage lenders pulling our free VantageScore alongside a paid FICO score from Equifax,” Begor said during an earnings call on Tuesday.
In the second quarter, VantageScore mortgage volume reached 2.2 million transactions, nearly tripling from the first quarter, with the vast majority of those pulls coming from that 1,200-lender group.
Equifax also has roughly 100 mortgage lenders that have moved to using only VantageScore at the $1 price point for mortgage originations. Those lenders are primarily smaller, non-government-sponsored enterprise originators and lenders focused on HELOCs and home equity loans.
“Although volumes remained low at about 10,000 transactions in the quarter, we saw significant acceleration as we moved through the tail end of the quarter,” Begor said.
Begor told investors that Equifax makes no margin on FICO mortgage scores. FICO scores account for about 50% of U.S. Information Solutions mortgage revenue and roughly 7% of total Equifax revenue, “delivering zero margins,” he said. By contrast, VantageScore is jointly owned by Equifax, Experian and TransUnion.
Equifax is positioning its $1 VantageScore as a cost-saving tool for originators and consumers. The company continues to cite a potential $1 billion annual cost savings opportunity as lenders shift volume from FICO.
Begor also stressed that while score choice matters, lenders are increasingly focused on the underlying data that feeds those scores. “What’s relevant is the credit data that’s used underlying the creation of that credit score,” he said, pointing to bureau files and trended data as central to underwriting decisions.
This article was written by Flávia Furlan Nunes and generated with the assistance of HousingWire Automation, then reviewed by a HousingWire editor before publication.
