Rocket will switch its default score in the fourth quarter, and TransUnion is locking in 99-cent pricing through 2028.
When a federal regulator removed the pricing penalty on VantageScore this week, the market punished almost everyone in the credit-scoring business. Beneath the selloff, the companies positioned to benefit were already acting.
Rocket Mortgage said it will make VantageScore 4.0 its preferred model for all eligible loans in the fourth quarter. "We did the work, compared the models and chose the one that helped more qualified clients," Chief Executive Jay Bray said. A switch by a lender of Rocket's size would be the first concrete test of whether pricing parity changes behavior.
TransUnion, which distributes VantageScore to lenders, extended its 99-cent promotional price for standalone VantageScore 4.0 mortgage pulls through December 2028. The bureau said more than 1,100 mortgage lenders adopted the score between January and September, including nine of its 15 largest mortgage customers.
Why the bureaus fell anyway
Shares of TransUnion fell about 4.4% on Tuesday, Equifax about 4.3% and London-listed Experian about 1.8%, as Fair Isaac plunged about 26.5%. Selling the whole group treats the bureaus as smaller versions of FICO. The bureaus’ business models differ from FICO’s. The bureaus sell the credit data that feeds both models and distribute VantageScore directly. A lender that swaps a FICO pull for a VantageScore pull is moving spending from FICO toward the bureaus, not away from the industry.
The 99-cent price makes the point. It is a deliberate bid for volume, designed to make the cheaper score even cheaper while mortgage lenders reconsider their defaults. Locking the price for more than two years also removes one of the objections lenders raise to switching: the risk that a promotional rate will reset once they are committed.
A claim to weigh carefully
VantageScore's public affairs chief, Tony Hutchinson, projected "nearly $1 billion in savings in the next 12 months alone" for consumers. That figure comes from the company that stands to gain most from the change and should be read as advocacy rather than analysis.
What to watch
Rocket's fourth-quarter switch is the leading indicator. If other large lenders follow and TransUnion's adoption count keeps climbing, the bureaus could benefit from a larger share of mortgage-scoring activity. If lenders instead keep pulling both scores to satisfy mortgage-bond investors, the shift will be slower and the benefit to the bureaus smaller.