Feb 4 (Reuters) - Credit bureau Equifax EFX.N forecast annual profit above Wall Street expectations on Wednesday, after topping fourth-quarter earnings and revenue estimates on strong growth in its mortgage segment.
Lenders are beginning to see a pickup in loan demand after a prolonged slowdown due to high interest rates, supported by a resilient labor market and economy.
As lenders step up loan originations, demand typically rises for credit scores and risk assessments - services provided by firms such as Equifax - to evaluate borrowers.
Equifax expects annual revenue to grow in the range of $6.66 billion to $6.78 billion, compared with Wall Street expectations of $6.59 billion, according to estimates compiled by LSEG.
"Our 2026 guidance reflects an assumption that the U.S. Mortgage market will be down low single digits in 2026 compared to 2025 as well as an assumption that 100% of mortgage credit scores will be FICO scores," CEO Mark Begor said in a statement.
"As U.S. mortgage customers convert to the lower-priced and higher-performing Vantage scores, we expect significant margin expansion."
VantageScore, founded in 2006, is a joint venture between credit bureaus Equifax, Experian and TransUnion.
Credit scores are used across the financial system to assess borrower risk, shaping decisions on mortgages, credit cards, auto loans and personal lending, while also influencing interest rates, credit limits and loan approvals.
The mortgage scoring market is dominated by Fair Isaac Corp FICO.N, which last year unveiled plans to sell its 'FICO' credit scores directly to mortgage lenders and resellers, bypassing credit bureaus such as Equifax.
Equifax has since said it will expand VantageScore's mortgage credit score offerings to combat FICO's price actions.
Shares of the company rose 1% in premarket trading after it posted a 20% jump in U.S. mortgage revenue for the fourth quarter.
It earned $2.09 per share on an adjusted basis in the three months ended December 31, beating expectations of $2.05 per share.
Equifax's quarterly revenue came in at $1.55 billion, above $1.53 billion that analysts had projected.
(Reporting by Manya Saini in Bengaluru; Editing by Shreya Biswas)
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