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Why FICO Must Be Investigated for Antitrust by the DOJ and FTC
Introduction
The Fair Isaac Corporation—better known as FICO—has become the invisible gatekeeper of America’s credit system. Its proprietary credit score determines who can buy homes, get car loans, or access small business credit. But beneath its veneer of reliability lies a structural problem: FICO’s power may have crossed into monopoly territory. With soaring fees, a near-total market share, and barriers that prevent new competitors from entering, the company’s control deserves formal antitrust scrutiny by both the Department of Justice (DOJ) and the Federal Trade Commission (FTC).
FICO’s Market Power: The Definition of Dominance
FICO’s credit scoring products are used in roughly 90% of all U.S. lending decisions. That means banks, mortgage originators, and auto lenders rely on FICO’s algorithm to determine creditworthiness—often because no alternative scoring system can gain traction.
This dominance gives FICO near-complete control over both pricing and market entry. In recent years, the company has raised the per-score fee for mortgage lenders by more than 40%, costs that are then passed to consumers. When one firm controls the standard, the supply, and the pricing of credit data, it no longer competes—it dictates.
Exclusionary Behavior and Rising Costs
Under antitrust law, dominance alone isn’t illegal—but using that dominance to suppress competition is. FICO’s pattern of behavior fits that definition.
- Fee hikes: Repeated increases in per-score pricing have far outpaced inflation, straining small lenders and raising consumer costs.
- Litigation strategy: FICO has fought competitors in court to preserve its exclusivity and discourage alternative scoring models.
- Contractual lock-ins: Lenders often must integrate FICO into core credit systems, making switching to rivals costly or practically impossible.
Together, these practices suggest a deliberate attempt to preserve monopoly power, not compete on merit.
Consumer and Market Harm
The victims of FICO’s dominance aren’t just competitors—they’re borrowers. Every price hike trickles down to the consumer through higher loan origination costs. And by limiting innovation in credit scoring, FICO effectively decides which Americans remain “credit invisible.”
New entrants with more modern, inclusive models—those that consider rental history or alternative data—struggle to gain traction because lenders are locked into FICO. The result is a chilling effect on innovation and fairness in the credit system.
Legal and Policy Precedent
Under Section 2 of the Sherman Act, it is illegal to “monopolize, attempt to monopolize, or combine or conspire” to do so. FICO’s share of the business-to-business credit scoring market—approaching 90%—easily meets the threshold for monopoly power.
The DOJ has investigated FICO in the past, and U.S. courts have already allowed antitrust claims against the company to proceed. With mounting evidence of exclusionary conduct and nationwide consumer harm, the FTC and DOJ have both the jurisdiction and precedent to act.
Why the Timing Is Critical
As interest rates stabilize and mortgage origination volumes normalize, lenders are more sensitive than ever to costs. FICO’s pricing power amplifies those costs systemwide, introducing hidden inflation into the credit system.
At the same time, Washington’s antitrust focus has broadened from Big Tech to any infrastructure monopoly that touches consumers daily—credit scoring is exactly that. Allowing FICO to continue unchecked runs counter to the Trump administration’s pro-competition framework and the FTC’s stated mission of protecting consumers from market concentration.
What the DOJ and FTC Should Investigate
A modern investigation should focus on:
- Pricing history: Whether FICO’s repeated fee increases reflect competitive cost pressures or monopolistic rent extraction.
- Exclusionary contracts: How FICO structures agreements with lenders, credit bureaus, and government agencies.
- Data access barriers: Whether competitors are denied or priced out of fair access to credit performance data.
- Consumer harm: How monopoly pricing indirectly raises the cost of credit across the economy.
- Market alternatives: Whether structural or behavioral remedies could introduce competition without disrupting credit reliability.
Possible Remedies
If investigators find evidence of monopolization, regulators could pursue several remedies:
- Behavioral remedies: Limit FICO’s ability to impose exclusivity or predatory pricing.
- Transparency mandates: Require disclosure of scoring methodologies and pricing schedules.
- Licensing reforms: Open the market to competing scoring models with fair access to credit data.
- Market diversification: Encourage adoption of alternative models like VantageScore to foster competition.
Counterarguments and Rebuttals
FICO will argue that its market share is earned through trust and accuracy, not coercion. It will claim that lenders freely choose FICO because it works. Yet when one firm controls access to an essential financial utility, “choice” becomes illusionary. The issue isn’t whether FICO’s product is good—it’s whether it has used its dominance to block fair competition and extract monopoly profits.
Conclusion
FICO’s credit scoring model sits at the center of America’s financial infrastructure. But its unchecked control over access, pricing, and competition has transformed what was once an innovation into a choke point for consumers and lenders alike.
The DOJ and FTC must step in—not to punish success, but to protect competition in an industry that affects nearly every borrower in the country. FICO’s dominance has crossed from leadership into monopoly, and that demands a full antitrust investigation.
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