TransUnion Activates New Credit Scoring Model to Lower Homebuyer Costs

2026-01-09 companies

Chicago, Thursday, 8 January 2026.
TransUnion’s newly active pricing model offers VantageScore 4.0 at a 60% discount compared to FICO, aiming to significantly reduce underwriting costs for lenders and homebuyers.

Strategic Shift in Mortgage Underwriting

TransUnion (NYSE: TRU) officially activated its 2026 mortgage pricing model last week, executing a strategic update originally announced on October 17, 2025 [1][2]. The new framework centers on the widespread adoption of VantageScore 4.0, which the company is now offering to lenders at a rate of $4 per score for the 2026 fiscal year [1][3]. This pricing structure represents a significant competitive maneuver, with the cost set at a 60% discount compared to traditional FICO scores [1][4]. The initiative is designed to assist lenders in maintaining underwriting costs that are effectively flat compared to 2025 levels, addressing affordability concerns in the housing market [1][3].

Data Depth and Predictive Power

At the core of this operational shift is the integration of more robust consumer data. VantageScore 4.0 leverages up to 30 months of trended credit data, incorporating non-traditional financial metrics such as rental and utility payment histories to assess borrower risk [1][3]. According to TransUnion CEO Chris Cartwright, this expanded data set delivers “unmatched predictive power” while aiming to broaden loan access for qualified homebuyers who might otherwise be excluded by legacy scoring models [1][2]. This move aligns with broader industry efforts to enhance the precision of creditworthiness assessments while reducing barriers to homeownership [3].

Combating Inflationary Data Costs

The implementation of this pricing model arrives as the mortgage industry grapples with soaring operational expenses related to data procurement. TransUnion explicitly cited rival royalty adjustments as a primary driver of rising costs, noting that FICO royalties have surged by more than 1,600% over the last four years [1][4]. Specifically, these royalty hikes are reported to exceed 100% for the 2026 fiscal year alone [2][4]. By bundling credit data with the VantageScore 4.0 model, TransUnion intends to insulate lenders from these sharp inflationary pressures, offering a more stable cost structure for mortgage origination [1].

Regulatory Pressure and Corporate Outlook

The timing of this rollout coincides with heightened regulatory attention on credit reporting agencies. In early January 2026, the Federal Housing Finance Agency (FHFA), led by Director Bill Pulte, publicly criticized major credit firms regarding their pricing practices, a development that caused shares of companies like TransUnion and Equifax to fall [5][6]. Amidst this scrutiny, TransUnion continues to adjust its leadership strategy, appointing Francesca Noli as Executive Vice President on January 5, 2026, to lead its Global Consumer Solutions portfolio [4][5]. Despite recent market volatility, long-term forecasts remain optimistic, with projections suggesting revenue could reach $5.6 billion by 2028 [5].

Sources

TransUnion Mortgage