Shares of Fair Isaac were on pace to log their worst daily percentage decline in more than six years on Tuesday after Bill Pulte, the director of the Federal Housing Finance Agency, said mortgage pricing will be simplified and that the new structure will incorporate a direct competitor to Fair Isaac's FICO score.

It's just the latest sign that Fair Isaac could be losing its dominance.

Fair Isaac stock dropped 20% to $669.78 on Tuesday and was the worst performer in the S&P 500 for the trading session.

The statistics weren't pretty for the stock. Shares on Tuesday were on pace for their lowest closing price since March 17, 2023, and for their worst daily performance since March 16, 2020, according to Dow Jones Market Data. It was even bleaker when looking at September as a whole with the stock down 42% and on pace for its worst ever monthly performance based on available data back to July 1987.

Investors were selling Fair Isaac stock after Pulte posted on social media late Monday that the agency was simplifying mortgage pricing and that Fannie Mae and Freddie Mac were moving to a single pricing grid from the previous two.

Pulte, importantly, added that the new pricing grid structure will incorporate VantageScore, a direct competitor to the FICO score. VantageScore is a joint venture of credit bureaus Equifax, TransUnion, and Experian.

"Fannie and Freddie are hereby moving to one pricing grid with VantageScore joining the existing FICO Classic pricing grid," Pulte said in a post to X.

Historically, if someone wanted to buy a home they needed a FICO score.

Now VantageScore joins the existing FICO Classic pricing grid, which has long been the only credit score accepted on the mortgage pricing grid. This means that lenders will no longer necessarily have to pay for a FICO score and potentially bypass Fair Isaac completely.

The decision to simplify the mortgage pricing grid wasn't the only bad news for Fair Isaac stock.

Rocket Mortgage, part of Rocket Cos., said Monday it will be the first mortgage lender to use VantageScore 4.0 as its preferred credit scoring model for all eligible loans. The company said it will default to VantageScore in the fourth quarter for mortgages that will be delivered to Fannie Mae and Freddie Mac.

For any investor paying attention, none of this should be shocking. Pulte has repeatedly stated that credit score competition is a positive. Fair Isaac stock has been in a steep downtrend since November 2024 when it closed at a record high of $2,382.40.

TransUnion and Equifax were down 2.9% and 3.6%, respectively on Tuesday. Rocket Cos. stock rose 0.5%.