Fair Isaac Corp. (NYSE: FICO) cratered nearly 27% Tuesday, its steepest one-day drop since May 1989, after regulators opened the door to a rival credit score in the mortgage market.

Federal Housing Finance Agency Director Bill Pulte announced that Fannie Mae and Freddie Mac will move to "one pricing grid" with VantageScore joining FICO Classic.

The change ends FICO's pricing advantage in a market it has dominated.

TransUnion (NYSE: TRU) added pressure by extending VantageScore 4.0 pricing at 99 cents per score through December 2028. TransUnion fell 4.6%, while Equifax Inc. (NYSE: EFX) also traded lower.

TD Cowen's Jaret Seiberg said the move is about shifting pricing to push lenders toward VantageScore, not about predictive power. RBC's Ashish Sabadra kept an Outperform rating but warned of higher "score shopping" risk.

FICO is now down about 59% from a year ago and the stock trades at the lowest levels since early 2023.