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FHFA Director Bill Pulte’s tweet dented Equifax, Experian and TransUnion shares as the MBA renewed calls to do away with tri-merge reporting.

Quick Read

FHFA Director Bill Pulte has vowed to protect consumers from rising credit report fees by Equifax, Experian, and TransUnion, amid mortgage lenders’ concerns over significant price hikes.
The Mortgage Bankers Association advocates for eliminating tri-merge credit reporting in favor of a single credit score system, aiming to reduce costs and increase competition among credit bureaus.
Pulte has expressed frustration with credit bureaus’ pricing but has not indicated support for the MBA’s proposed single-score solution, maintaining the current tri-merge reporting requirement for Fannie and Freddie loans.
Credit bureaus blame fee increases primarily on Fair Isaac (FICO), while Fair Isaac attributes costs to bureau markups; adoption of new FICO 10T and VantageScore 4.0 models by Fannie and Freddie is pending.

An AI tool created this summary, which was based on the text of the article and checked by an editor.

A warning from the head of Fannie Mae and Freddie Mac’s federal regulator that it “will protect the American consumer” from fee hikes imposed by credit reporting agencies Equifax, Experian and TransUnion got the attention of investors in the publicly traded companies Tuesday.

But while Federal Housing Finance Agency Director Bill Pulte seems to share mortgage lenders’ concerns about price increases, he’s given no indication that he’s willing to consider the solution being pushed by an industry trade group: Do away with “tri-merge” reporting and allow lenders submitting loans to Fannie and Freddie to generate a single credit score for each borrower instead of three.

The Mortgage Bankers Association endorsed moving to a “single file/single score” approach last summer, saying it’s a system that works well for most other consumer finance markets, including home equity loans and auto loans.

MBA President Bob Broeksmit outlined the case for the policy change again in a Dec. 12 letter to Pulte.

Bob Broeksmit

“The current … requirement to obtain a report from each of the three credit reporting agencies creates a situation where there is no competition between bureaus for the product,” Broeksmit complained. “Predictably, a market with only three providers, and a mandate to purchase a report from all three, subjects the industry to price increases with no available alternative or countervailing price pressures.”

Broeksmit said lenders are looking at 2026 price increases for credit reports averaging 40 percent to 50 percent, the fourth consecutive year of “dramatic price increases.”

“Lenders must cover these costs for all applicants, even on loans that do not close, and pass them on to borrowers as part of the origination process, adding hundreds of dollars to borrowers’ closing costs,” Broeksmit said.

Pulte acknowledged receipt of the letter in a Jan. 5 post on the social media platform X that dented the share prices of Equifax, Experian and TransUnion when markets opened Tuesday.

Bill Pulte

“I do not understand what the credit bureaus are doing with their pricing — they are inviting a lot of scrutiny that is only intensifying by the day,” Pulte wrote.

Pulte said he’s been communicating with the CEOs of companies on “related issues but it is falling on deaf ears.”

The Consumer Data Industry Association (CDIA), which represents credit reporting agencies, pointed Inman to a statement it issued in November defending tri-merge reporting and blaming price increases on Fair Isaac, the creator of the FICO score.

“More data, not less, is required to protect lenders and taxpayers and open up more opportunities for borrowers,” the CDIA maintains. “The solution to bringing down costs for consumers isn’t less data, it’s greater choice in the mortgage-scoring market.”

Equifax, Experian and TransUnion have formed a joint venture, VantageScore, to compete against Fair Isaac. The credit bureaus maintain files on consumers that track their debts and repayment histories, and that information is fed into credit score algorithms like FICO and VantageScore to generate credit scores.

As part of plans to retire the FICO Classic algorithm in 2025, the FHFA had proposed requiring lenders to evaluate borrowers using two more inclusive algorithms: FICO Score 10T and VantageScore 4.0. As part of the switch, lenders were to be allowed to obtain credit scores using data from just two credit reporting agencies (“bi-merge” reporting).

But the FHFA pushed back the timeline for implementing that plan last year, with lenders still waiting for historical data for FICO Score 10T that would allow them to update their procedures.

When Pulte ordered Fannie and Freddie to start accepting VantageScore 4.0 in July — an order they’re still working to implement — he said lenders would be required to continue obtaining tri-merge reports.

With Fair Isaac announcing on Dec. 1 that it had agreed to release historical FICO Score 10T data to Fannie and Freddie, the stage could now be set for VantageScore 4.0 to go head-to-head with FICO Score 10T later this year. Their backers say the new scores are more inclusive, considering trended credit data and additional inputs such as rent, utility and telecom payments to help more people qualify for loans.

But for now, Fannie and Freddie continue to require that lenders score borrowers using the FICO Classic algorithm to generate three credit scores using data from Equifax, Experian and TransUnion.

“The price increases we are seeing play out in the industry are primarily the result of FICO’s price increase and actions,” the CDIA argues.

For its part, Fair Isaac has put the blame on markups charged by credit reporting agencies, and rolled out a new direct license program that allows resellers of tri-merge credit reports to generate credit scores themselves.

Participating tri-merge resellers like Cotality (formerly CoreLogic) and Ascend subsidiaries Advantage Credit and Partners Credit still have to pull credit reports from each of the three major credit reporting agencies. But they pay Fair Isaac directly for the right to use the FICO algorithm.

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