No FICO, no loan. Until now…

Today’s Big Picture

Two things decide what you pay to borrow…

• The market’s price of money
• And the score that decides which price tier you land in. 

Both moved last week.

Friday’s jobs report showed just 29,000 new jobs in September, about a third of what Wall Street expected. Traders cut the odds of an October rate hike to roughly one in five.

The yields that mortgages follow went up anyway. The 10-year Treasury ended Friday near 5.28%, just below Thursday’s peak, the highest level since 2002.

The Fed sets one rate. The bond market sets the one your mortgage follows.

The second lever moved too. Washington opened a second road around FICO, the company whose score has priced nearly every conforming mortgage for decades, and FICO’s stock had its worst day since 1989.

Below, Dylan Jovine explains why a toll booth loses its value once a second road opens, and what that means for anyone who will ever need a loan.

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Signal vs. Noise

The Revisions Took 60,000 Jobs Back

• The noise: unemployment ticked up to 4.2%, from 4.1%.
• The signal: the revisions. On Friday we said they could matter more than the headline. August’s 162,000 became 133,000, July turned negative, and together the two months gave back 60,000 jobs.

That leaves the three-month average near 51,000 jobs a month. Pay rose just 0.1% in September and 3.0% from a year ago, still behind prices rising 3.4%.

Health care added 17,000 jobs, about half its usual monthly pace, and financial jobs have fallen by 129,000 since May 2025, mostly at insurers. Weaker hiring is why traders now expect the Fed to wait in October, even as they still price a hike by December.

For beginners: hiring at that pace means a job market cooling slowly, with paychecks still trailing the cost of living.

Tesla Beat, With Help From the Lot

• The noise: Tesla’s deliveries fell 2.1% from a year ago, when buyers rushed to beat the end of a federal tax credit.
• The signal: Tesla handed over 486,532 cars, beating its own analyst survey by about 24,500, and delivered roughly 22,000 more than it built. The difference came out of inventory, cars already sitting on lots.

Energy storage, at 13.7 gigawatt-hours, came in short of what analysts expected. A beat built partly on clearing inventory tells you buyers showed up, but it says less about demand next quarter than the headline suggests. Tesla reports full results on October 21.

OPEC+ Held Steady on Paper

• The noise: OPEC+ kept its November production targets unchanged on Sunday, its second pause in a row.
• The signal: those targets barely bind right now. With the Strait of Hormuz disrupted by the conflict with Iran, Gulf exports have been running at 60% to 80% of normal, per Reuters, so the core members are already producing well below their quotas.

Brent’s December contract settled at $102.25 on Friday, and WTI, the U.S. benchmark, at $91.11 for November. The group meets again November 1.

For beginners: a quota only matters when producers can reach it, and this month the shipping lanes matter more than the meeting. Pump prices follow the barrels that reach buyers, whatever the quota says.

Featured Contributor

Today’s guest is Dylan Jovine of Behind the Markets. Over nearly three decades on Wall Street he founded the brokerage and investment bank Lexington Capital Partners at 24, then built his research firm Tycoon Publishing to more than 500,000 readers across 28 countries before selling it to Agora in 2011.Today’s issue is a lesson in business models, not a stock recommendation.

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Washington Just Broke FICO’s Mortgage Monopoly. The Stock Had Its Worst Day Since 1989.

For decades, every conforming mortgage in America ran through one company’s math.

If you wanted a loan that Fannie Mae or Freddie Mac would buy, your lender pulled your FICO score. No FICO, no loan.

That kind of power shows up in the price.

In 2024, FICO’s wholesale royalty was $3.50 per mortgage score, per Mortgage Professional America. In 2025, $4.95. For 2026, FICO set a $10 per-score price for the resellers who deliver scores to lenders, per its own October 2025 announcement.

Critics call that a doubling; FICO says resellers were already paying about that much on average. Either way, it lands on a product every borrower is forced to buy, and Senator Josh Hawley opened an investigation into the pricing back in March.

Then on Monday, September 28, Washington moved to level the field.

FHFA Director Bill Pulte announced that Fannie and Freddie will move to one pricing grid, accepting both Classic FICO and a rival called VantageScore 4.0, per Forbes. No effective date has been set yet.

By Tuesday’s close, FICO stock had fallen 26.5%. Forbes called it the worst day for the stock since 1989.

VantageScore is owned by the three credit bureaus, and TransUnion will sell it for mortgages at 99 cents a score, with that price locked through December 2028, per Forbes.

99 cents a score, against $10.

Lenders aren’t waiting around. Rocket Mortgage tested both models across 1.4 million credit reports and found VantageScore qualified more borrowers. Starting in Q4, it becomes Rocket’s default for direct-to-consumer loans, per Forbes.

So why does a one-day crash that big make sense for a company that hasn’t reported a revenue loss yet?

Because of what Wall Street was actually paying for. Last quarter, FICO’s Scores segment booked $458.9 million in revenue, up 41%, at a segment operating margin around 91%, per Forbes.

A 91% margin isn’t a business. It’s a toll booth.

And a toll booth is only worth a premium while there’s no other road. VantageScore was already used on roughly 9% of Fannie and Freddie mortgages from May through August, according to VantageScore.

That was before the unified grid. Before the 99-cent price. Before Rocket flipped.

My read: monopoly pricing works right up until it becomes the reason you lose the monopoly. Critics say FICO doubled its fee going into 2026, and that $10 charge is exactly what made a 99-cent rival irresistible to regulators and lenders at the same moment.

The lesson travels well beyond FICO. When a company’s margin comes from the absence of choice, watch the choice, not the earnings.

- Dylan Jovine

Behind the Markets

The Dollar Doesn’t Have to Be Your Only Option

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Final Thought

Most people never see their mortgage score until a lender quotes them a rate. One thing anyone can do this week: check your credit reports for free at AnnualCreditReport.com, and when you apply for a loan, ask which score model the lender uses.

We looked at another toll booth last month, the exchange operator CME, which earns a fee on nearly every hedge in the market [LINK: Sept 15 issue]. Different road, same question: what happens to the price when a second road opens.

A week into the quarter, our five calls stand like this: the 10-year near 5.28%, the dollar index near 101.9, Bitcoin near $86,000, and gold near $4,140, the closest of the five to its line. Markets still price a December rate hike as likely.

This week brings the services survey today, the Fed’s meeting minutes on Wednesday, and inflation the following Wednesday, October 14.

- Rami Al-Sabeq

Editor in Chief | Future Finance

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Disclaimer: This content is not financial advice, it is for informational purposes only. All investments involve inherent risk. Any financial decisions you make are solely your responsibility.

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