Why this matters now
In 2025 the mortgage score landscape shifted in two important ways: FICO introduced a Mortgage Direct License program that lets tri‑merge resellers obtain and distribute FICO® Scores directly, and federal policy changes cleared the way for lenders to use VantageScore® 4.0 for loans sold to the major Government‑Sponsored Enterprises (GSEs). These changes affect which score a lender may run, how much lenders pay for scores, and — indirectly — lender pricing, automation and how quickly your loan application moves through underwriting.
This article breaks down the practical implications for mortgage applicants: where scores may come from, what the new pricing options mean for lenders (and possibly consumers), how VantageScore differs from FICO in data treatment, and what questions to ask your loan officer.
FICO Mortgage Direct License: what changed and the pricing models
FICO’s Mortgage Direct License (announced October 1, 2025) gives tri‑merge resellers the option to license FICO® Scores directly from FICO rather than receiving those scores via the three nationwide credit bureaus. Under the program FICO offers two primary pricing approaches: (1) a performance model with a lower per‑score royalty (reported as $4.95 per score) plus a funded‑loan fee (reported as $33 per borrower per score), and (2) a traditional flat per‑score fee (reported at about $10 per score). The stated goal is to reduce intermediary markups and increase price transparency for mortgage participants.
Why it matters to borrowers: lenders and tri‑merge resellers control which distribution channel they use. If resellers and lenders adopt the lower‑cost direct option, that can reduce operational costs for lenders and may reduce one of the many per‑loan overhead items — though lenders are not required to pass those savings to borrowers. Industry reaction has been swift, with market commentary and bureau pricing responses appearing immediately after the announcement.
Practical checklist for applicants
- Ask which score model (FICO Classic, FICO 10T, or VantageScore 4.0) and which score source (reseller via bureau or direct from FICO) the lender used when underwriting your loan.
- Request the exact score version and the tri‑merge report date on any adverse‑action or approval notices — scores and models can differ materially.
- If you’re shopping lenders, compare disclosures: some lenders will continue using bureau channels while others move to direct licensing or alternative scores.
VantageScore 4.0 adoption and what it means for borrower eligibility
In July 2025 the Federal Housing Finance Agency (FHFA) cleared lenders to use VantageScore® 4.0 alongside Classic FICO for loans sold to Fannie Mae and Freddie Mac, signaling formal credit‑score competition in the mortgage market. VantageScore 4.0 includes different modeling choices than many FICO Classic versions — notably broader use of alternative and non‑traditional data like rent and utility payments in some implementations — which means it may qualify some borrowers who previously fell short under older FICO versions.
Important operational notes and timing: FHFA’s change establishes permissibility, but widespread adoption requires integration work by resellers, lenders, and investors. Several industry observers and analysts warn adoption will be staged: lenders must update systems, tri‑merge vendors must deliver VantageScore on mortgage reports, and investors and automated underwriting systems must map banding and thresholds across score types. That means some lenders will be early adopters while others take longer to switch. If you have thin files or strong rental/utility histories, ask lenders whether they currently consider VantageScore or alternative payment records when underwriting.
What to ask your lender
- "Which score model did you run — FICO (which version) or VantageScore 4.0?"
- "Was the report tri‑merge and which reseller/bureau provided it?"
- "If I’m denied, can you provide the written notice showing the score, version, and the monitoring source so I can dispute or shop elsewhere?"