FICO Stock Surges 7.74% Despite 48th Rank in Trading Volume Amidst Alternative Data Challenges

On May 28, 2025, Fair Isaac Corporation (FICO) saw a significant increase in its stock price, rising by 7.74%. The trading volume for the day was 11.83 billion, marking a 23.45% decrease from the previous day. This placed FICO's trading volume at the 48th position among all stocks traded that day.

FICO, a leading player in the credit scoring industry, is facing increasing pressure from the rise of alternative data sources. Traditional credit scoring models, which rely heavily on payment histories, are being challenged by new data inputs such as cash flow, income, rental payments, and bank-account level data. These alternative data sources are helping to make previously unscorable consumers scorable, thereby reducing credit access gaps.

Regulatory pressures and potential moves by government-backed entities like Fannie Mae and Freddie Mac to consider alternative credit scoring methods are adding to the challenges faced by FICO. The company has been criticized for boosting prices charged for access to FICO scores, which has led to speculation that government-backed mortgage entities may explore other credit reporting options.

Despite these challenges, the FICO score remains a widely recognized indicator of creditworthiness. However, the credit arena is becoming more competitive, with new entrants like Plaid launching their own solutions to enable access to individual-level cash flow reporting. This trend towards alternative data is broadening the inputs of credit scoring models, making them more inclusive and tailored to individual situations.