00:00Nathan, I will say, you know, these credit score bureaus are the bane of many Americans' existence.
00:05So a lot of people celebrating the downfall of those companies.
00:08Are they going to go away?
00:11No, I don't think they're going to go away.
00:12And one of those individuals that most likely will be celebrating is going to be FHFA director William Pulte.
00:17He said on X that he's going to have a statement.
00:20And he's been pressuring Fair Isaac in particular to lower the cost for mortgages.
00:24Now, what Fair Isaac did here is they essentially cut out the credit bureaus.
00:27And credit bureaus, when they use a FICO score, when you go forth with a mortgage, they charge about $10 per score.
00:33What FICO is doing is now saying, look, we're going to cut you out and we're going to charge $4.95.
00:38So how does the credit bureaus respond?
00:40Well, you know, we're talking about a significant portion of their revenue, but it's not everything.
00:46So they could potentially bundle this, whether it's services.
00:49Employment verification has become a new winner for the credit bureaus over the last couple of years.
00:54But they also have a rival score called the Vantage score, which they could be pushing further.
00:59But ultimately, for these credit bureaus, it's going to increase competition, really hit their margins on the mortgage space and really pressure revenues.
01:05And you can see just with the FICO move, Nathan, the stock just halted trading because of volatility to the upside, up 22%.
01:12I think a lot of people would look at this news and say, how does it help me?
01:15As Matt pointed out, people hate these credit rating agency bureaus because of the issues of transparency and understanding exactly what goes into it.
01:24Does it change anything for day-to-day people who look at their credit score and hope to improve it and hope to even understand it?
01:31Not right now, but I will just say is that we are awaiting this statement from FHF Director Bill Pulte because I don't think this is the last of what we're going to see going on with credit reporting agencies in particular.
01:44You know, he's had several discussions with FICO.
01:47He's also had several discussions with the agencies themselves in terms of trying to lower the cost for mortgages.
01:52But why stop at mortgages?
01:54There is going to be other things out there that, you know, you're going to see policymakers be focused on to try and lower these scores or not lower the scores, but lower the price of these scores in the impact that they have on everyday Americans.
02:05But that's why I think the credit bureaus have also been shifting their focus over the last couple of years.
02:08Like I just mentioned, employment verification and also just into different types of information of when you need to verify who you are and verify, you know, your source of income and so forth like that.
02:19So, you know, I think the credit bureaus are going to be able to respond here in a way where I don't think they're going to be able to ultimately be able to claw back some of the lost revenue that's going to come with this move.
02:29But there's a real strategic reckoning coming for this industry because, you know, the pressure is going to continue.
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