Why FICO (FICO) Is Fighting Back Against VantageScore Pressure

Fair Isaac Corporation (NYSE:FICO) is one of the best underperforming tech stocks to buy for a turnaround. FICO has been hit hard by worries that its credit-scoring moat could weaken as the mortgage market opens further to competing models. On April 22, Reuters reported that Fair Isaac shares fell 12% after Fannie Mae and Freddie Mac said they would begin accepting mortgages assessed with VantageScore 4.0, a rival model backed by Equifax, Experian, and TransUnion. The pressure has been severe enough that FICO was still roughly 50% below its 52-week high in mid-May.

The turnaround case, however, received fresh support on May 18, when FICO said an independent Milliman analysis found that FICO Score 10T was more predictive than VantageScore 4.0 for first-time homebuyer mortgage risk. The study covered nearly 20 million mortgages from 2011 through 2023, and FICO said nearly 60 lenders had already signed up for its free-access program to test FICO Score 10T alongside Classic FICO.

The company also gave investors a stronger fundamental backdrop on April 28, reporting fiscal second-quarter revenue of $691.7 million, up 39% year over year. Scores revenue rose 60%, software revenue increased 7%, and FICO raised its fiscal 2026 revenue guidance to $2.45 billion from $2.35 billion.

Fair Isaac Corporation (NYSE:FICO) provides analytics, decision-management software, and credit-scoring products used by lenders, insurers, telecommunications firms, retailers, and other businesses. Its FICO Score remains a major U.S. consumer credit-risk benchmark.

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