So here's something interesting that just came across my desk from HousingWire. Equifax is locking in a discounted price on its VantageScore 4.0 credit product all the way through 2027. They started this push back in March when they began offering the score at one dollar to lenders who purchase FICO scores from them, and it looks like the strategy is really taking off. When the Federal Housing Finance Agency gave the green light for VantageScore use back in April, it opened the door for broader adoption across the industry.
The traction is real. According to HousingWire, in the second quarter alone, VantageScore mortgage volume hit 2.2 million transactions, nearly tripling from the first quarter. What's happening is roughly 1,200 mortgage lenders have started pulling VantageScore alongside their existing paid FICO scores from Equifax. Even more interesting, about 100 smaller lenders have made the jump to using only VantageScore for mortgages at that dollar price point, though their transaction volumes are still relatively modest.
Here's the business angle that makes sense to me. Equifax makes no profit margin on FICO scores, which represent about half of what they do in their information solutions division. VantageScore, on the other hand, is jointly owned by Equifax, Experian, and TransUnion, so there's real profit there. The company is promoting this as a way lenders could save roughly a billion dollars annually by shifting away from FICO.
That said, Equifax's leadership emphasizes that while the score choice matters, lenders are increasingly digging into the actual credit data underneath those scores. It's the underlying bureau files and trended data that really drive underwriting decisions, not just the number itself.
What I am seeing locally with my own clients is that the lending landscape continues to evolve pretty quickly. If more lenders start using VantageScore, we might see some changes in how approval decisions get made for Bay Area borrowers. For now though, the vast majority of our deals still run through traditional FICO scoring, so I'm watching this trend but not expecting dramatic shifts in our immediate market just yet.
