Episode summary
FICO’s Monopoly is Fading & Consumers Are the Winners w/ Kelsey Zhu | The Real Eisman Playbook Ep 59
The Real Eisman Playbook
· · 1 hr 11 min · Hosts: Steve Eisman · Guests: Kelsey Zhu
Summary
FICO’s mortgage score business is moving from a regulated monopoly toward a duopoly, and the pricing gap is the core issue. Kelsey Zhu said FICO raised mortgage score pricing from 60 cents per pull in 2022 to $10 per pull today, while Vantage Score is around $1, and she argued that lenders are increasingly willing to switch because the new score is cheaper and can widen mortgage access for thin-file and first-time buyers.
The discussion also traced the policy shift. After the 2018 Credit Score Competition Act and the FHFA’s 2022 proposal, the market was set up for FICO and Vantage Score to coexist. Zhu said new FHFA leadership in 2025 accelerated implementation, with approved lenders beginning pilots for Vantage Score 4.0, and she expects high-single-digit to low-double-digit share by Q1 2027. She said Street models still assume no market-share loss, which leaves earnings and multiples vulnerable if adoption widens.
The back half of the episode stepped back to Zhu’s broader coverage universe: the credit bureaus, Verisk, MSCI, and FactSet. Her framework emphasized industry structure, defensibility, recurring revenue, and capital allocation, while also weighing AI as both a cost opportunity and a competitive threat. She preferred Experian and TransUnion over Equifax, liked Verisk and MSCI for defensible moats, and saw FactSet as more exposed to capital markets cyclicality and passive-investing pressure.
Key takeaways
- Kelsey Zhu said FICO’s mortgage score pricing rose from 60 cents per pull in 2022 to $10 per pull today, creating a strong incentive for lenders to adopt Vantage Score.
- Zhu expects Vantage Score to reach high-single-digit to low-double-digit mortgage share by Q1 2027, versus Street expectations of essentially no share loss for FICO.
- She said FICO’s 2027 and 2028 EPS estimates are 13% and 24% below Street numbers because pricing and share assumptions look too optimistic.
- Zhu sees Verisk’s core forms-loss-cost business as highly defensible, with pricing tied to customer premium growth rather than a one-size-fits-all model.
- She likes MSCI as a top pick, arguing its index franchise and brand are durable even as AI changes costs and workflows.
Notable quotes
“the FICO score pricing has 16xed. The credit bureaus have also raised their prices on credit data”
“I think the end outcome is we're transitioning from a regulatory enforced or regulation protected monopoly to now a duopoly marketplace”
“we're going to ask lenders to choose between the scores”
“the feedback that we've heard from the industry is they are excited about the new score”
“our numbers again 13% and 24% below street estimates for 2027 2028”
How the episode opens
As some of you may know, I am very excited to share that on Friday, May 15th, I'm launching the Real Eyesman Playbook Premium, a membersonly subscription. I want to emphasize that Monday and Friday episodes will stay accessible at no cost on YouTube and all audio channels. There will be no change at all in the real Eman Playbook twice weekly free episodes.
Premium is for our listeners and viewers who just want more. Premium members get a weekly bonus episode that will run the gamut from master classes to deep dive analysis of industry sectors and subsectors to mailbag episodes where I can answer many more questions. We will have a private community board where we can all connect and learn from each other.
Also, all of the past and future episodes of the real Eisman playbook will be available ad free. I want to thank everyone who was already signed up for the mailing list on the real Eisman playbook. And for those of you who have not yet signed up, see the link attached or go to my website, the realismanbenplaybook.com.
We will launch premium on May 15th with parts one and two of a 2hour master class called a conspiracy of credit. Part three will be available Wednesday, May 20th. In this master class, I discuss the intricacies of what is going on in the world of private credit and then connect private credit to the great financial crisis of 2008 and explain the toxic mortgage bonds that Wall Street manufactured during the GFC.
The master class also includes a primer on how the fixed income world actually works. If you've ever wanted to really understand what happened in 2008, not the movie version, the real version, this is it. Go to the link in the show notes and sign up for the mailing list.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fico monopoly
- credit scoring pricing
- vantage competition
- financial data providers
- ai in credit and data
Companies and tickers mentioned
- MSCI
- FDS
- FICO
- Autonomous
- Vantage
- Verisk
- MSCI
- FactSet
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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