Shares of credit scoring giant Fair Isaac (FICO -0.22%) slumped 21.9% this week through Friday at 2:10 p.m. ET, according to data from S&P Global Market Intelligence.

Fair Isaac didn't release any financials this week, but its underperformance came after Federal Housing Finance Agency (FHFA) Director Bill Pulte made critical comments over recent FICO price increases, along with announcing a review of the need to pull credit reports from all three credit bureaus.

Lower prices and volumes of credit reports would obviously be bad for FICO, if any such changes were implemented.

Pulte goes after FICO and credit bureaus

Last November, Fair Isaac announced it would be raising its wholesale price on credit scores for mortgage applications from $3.50 to $4.95. But this week on X, Pulte was critical of FICO's recent price increases, while questioning the transparency around inconsistent prices increases for some credit reports from the three major credit bureaus in the recent past.

In addition, Pulte also said his agency would be reviewing the need for "tri-merged" scores on mortgage applications, which take credit scores from all three major credit bureaus, while investigating a potential switch to "bi-merged" scores, which would only use two.

Since the major credit bureaus use FICO scoring models with their own weightings along with other models, a lower volume of credit scores needed for bi-merged reports could affect FICO's volume.

An outstretched hand holding houses and dollar signs.

Image source: Getty Images.

But some analysts say buy the dip

It should be known that while the announcement was definitely a cautionary bit of news, mortgages are only one type of loan, and FICO scores are used for a wide range of credit. Furthermore, Fair Isaac does other things besides scoring, as it sells software and analytics services, too. Those non-scoring businesses made up about 40% of revenue last quarter.

Meanwhile, sell-side analyst Surinder Thind from Jefferies also noted that even if bi-merged scoring were adopted, FICO's earnings per share may only be affected by about 16%, at most. Therefore, he advocated buying the dip this week.

FICO has been a long-term winner, with a high-margin business and annuity-like revenue stream. If this week's threats only turn into mild changes, the pullback could be an opportunity.