By Nate Wolf

If you have had trouble tracking the battle over -- of all things -- the credit-score economy, you aren't alone. To make matters simple: Shares of Fair Isaac have tumbled as its eponymous FICO score faces more scrutiny from regulators and fiercer competition from rivals.

That selloff is overblown, according to Mizuho Securities. The firm initiated coverage of Fair Isaac with an Outperform rating and a $1,416 price target in a research note Thursday. The market, Mizuho argued, is underestimating FICO's grip on the mortgage market.

Fair Isaac stock jumped 2.2% to $1,052.44 on Thursday. Shares are down 39% this year as of Wednesday's close of trading.

FICO's main competition in mortgage scoring is the VantageScore, a joint-venture of credit bureaus Equifax, TransUnion, and Experian. The trio last month lowered their prices for the VantageScore 4.0 to about $1 apiece from between $4 and $4.50. The move undercut Fair Isaac, whose FICO score has dominated mortgage originations for decades.

Amid pressure from regulators and legislators, the companies have been on a race to the bottom on price. Whoever wins that race, FICO will still be the score of choice, Mizuho said.

"While VantageScore is priced below FICO and has seen rapid usage growth in areas such as credit cards and consumer websites/apps, we expect market adoption in mortgage underwriting to be limited," wrote analyst Sean Kennedy.

FICO scores are entrenched in lending, securitization, and risk management functions throughout the mortgage ecosystem, Kennedy noted. These areas value predictability and standardization, which FICO provides.

To be sure, the price war with the credit bureaus has wounded Fair Isaac. The company will likely have less pricing power than it has previously enjoyed, Mizuho said, after the Federal Housing Finance Agency last year said Fannie Mae and Freddie Mac would allow lenders to use VantageScore 4.0 as an alternative to FICO.

But with its valuation near a 10-year low relative to the S&P 500, the concerns around Fair Isaac are already baked into the stock. If mortgage rates fall, sparking a comeback in originations and refinancing, both Fair Isaac and the credit bureaus are poised to benefit, Mizuho said.

The firm also initiated coverage of Equifax with an Outperform rating and a $222 price target and TransUnion with a Neutral rating and an $80 target.

Equifax shares rose 1.6% to $189.78 on Thursday, while TransUnion was up 0.7% to $75.36. Both stocks are also down by double digits in 2026.

Write to Nate Wolf at nate.wolf@barrons.com

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April 16, 2026 10:27 ET (14:27 GMT)

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