FICO & LoanPASS Tool Aims to Reshape Mortgage Risk Analysis

BOZEMAN, MT – January 28, 2026 – Global analytics leader FICO and mortgage technology firm LoanPASS have launched a groundbreaking tool designed to accelerate the adoption of next-generation credit scoring. The new batch pricing tool, integrated into the LoanPASS platform, allows mortgage lenders to price thousands of loan files simultaneously using FICO® Score 10T and conduct direct, large-scale comparisons against the classic FICO score. This development marks a pivotal moment for the industry, particularly for lenders operating in the complex non-conforming mortgage market.

LoanPASS, which was the first Product and Pricing Engine (PPE) to implement FICO® Score 10T for non-conforming loans, is now empowering lenders with an unprecedented ability to analyze performance characteristics at scale. The tool is set to provide critical insights into rate advantages and risk management strategies, helping financial institutions make more informed decisions about transitioning to the industry’s latest scoring models.

The Data Advantage of Trended Scores

At the heart of this evolution is FICO® Score 10T's use of trended credit bureau data. Unlike traditional credit scores that provide a static “snapshot” of a consumer's debt at a single point in time, trended data offers a more dynamic, 24-month “time-lapse video” of a borrower's financial behavior. This includes whether they are consistently paying down balances, carrying revolving debt, or consolidating obligations over time.

This deeper, more nuanced view of creditworthiness is significantly more predictive. FICO’s internal studies suggest early adopters have seen potential improvements in predictive performance of up to 10% over previous versions. More detailed analysis reveals an 18.8% improvement in the Kolmogorov-Smirnov (K-S) statistic—a key measure of a model's ability to separate good and bad credit risks—over classic FICO models. For lenders, this translates into a tangible ability to reduce default exposure while potentially originating up to 5% more loans at the same risk level.

“FICO’s Mortgage and Capital Markets team is dedicated to helping lenders realize the full value of FICO Score 10T,” said Julie May, vice president and general manager of B2B Scores at FICO, in the original announcement. “LoanPASS’s new batch pricing capability builds on that vision by enabling lenders to compare pricing outcomes at scale with confidence.”

Unlocking Efficiency in Specialty Lending

The non-conforming mortgage market—which includes non-qualified mortgages (non-QM) and debt service coverage ratio (DSCR) loans for investors—serves borrowers who don't fit the strict criteria for loans sold to Government-Sponsored Enterprises (GSEs) like Fannie Mae and Freddie Mac. This segment demands more sophisticated underwriting and risk assessment due to the diverse financial profiles of its borrowers.

LoanPASS’s new tool directly addresses these challenges. By automating the pricing of entire loan portfolios, it eliminates laborious manual processes and provides immediate, actionable intelligence. Lenders can now run side-by-side comparisons to see exactly how their portfolio would perform under FICO Score 10T versus older models, identifying opportunities for more competitive pricing and better risk mitigation without expanding staff.

“Our goal has always been to give lenders the tools they need to stay competitive and we are incredibly proud to be the first PPE to offer FICO Score 10T for non-conforming loans,” stated Mike Lewis, president of LoanPASS. “Our integration of this advanced score gives lenders deeper insights into borrower risk profiles and pricing strategies.”

This capability is especially critical for lenders aiming to scale their specialty lending operations profitably. The platform’s flexible, no-code rules engine and open-API architecture allow for the rapid deployment of new products and ensure consistent, compliant decisions, ultimately improving loan quality and speed.

Accelerating an Industry-Wide Transition

The partnership arrives as the entire mortgage industry stands on the precipice of a major shift. In October 2022, the Federal Housing Finance Agency (FHFA) approved FICO® Score 10T for use by Fannie Mae and Freddie Mac, with full implementation expected to be completed in 2025. While this mandate will eventually reshape the conforming loan market, adoption has been hampered by the complexity and cost of updating legacy systems.

The LoanPASS tool effectively creates a sandbox for lenders to test and validate the new model on their own data before committing to a full-scale system overhaul. This ability to analyze performance with confidence is expected to significantly accelerate adoption, particularly in the non-conforming space where lenders have more flexibility.

FICO has been fostering this transition through its Early Adopter Program, which now includes over three dozen lenders representing more than $377 billion in annual originations. Early participants like Cardinal Financial and Guild Mortgage have already begun using FICO® Score 10T for non-GSE loans, signaling growing momentum.

A More Inclusive Future for Credit

The move toward more advanced, data-rich credit scores has implications that extend beyond lender efficiency. By providing a more holistic view of a consumer's financial habits, FICO® Score 10T has the potential to expand credit access and promote greater financial inclusion. Research shows that 51% of mortgages assessed with FICO® Score 10T received a higher score compared to Classic FICO, with 1.7% more applicants scoring above 740, a common threshold for premium pricing.

Furthermore, the model's ability to incorporate trended data, including rental payment history, can benefit individuals with thin or non-traditional credit files who have a strong history of making consistent payments. This more equitable assessment helps lenders identify creditworthy borrowers who may have been overlooked by older scoring methodologies.

The recent agreement between FICO and the FHFA to release historical FICO 10T datasets further enhances transparency, allowing the entire market to analyze the model's performance and prepare for its integration. As tools like the one from LoanPASS make these advanced analytics more accessible, the industry moves closer to a future where lending decisions are not only faster and more efficient but also more precise and equitable.