Oura Ring Pauses IPO & Netflix’s “Worrying” Engagement

John Coteau (0:00)

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Oura Ring has decided to wait for just the right time to exercise its IPO.

Emily Milliron (0:35)

And watch out credit scores. A competitor to FICO has entered the chat.

John Coteau (0:39)

For Tuesday, September 29th, it's Brew Markets Daily. I'm John Coteau.

Emily Milliron (0:42)

And I'm Emily Milliron. Let's get moving and grooving.

John Coteau (0:53)

All right, Emily, happy to have you back in the studio again today. A little later, we're gonna find out what if Netflix has been engaging you as a viewer and why the share price is down at the streamer. But first, Emily, what if your FICO score suddenly dropped by 27% in one day?

Emily Milliron (1:11)

I would be very upset, John.

John Coteau (1:12)

That would be very upsetting.

Well, the issue is that the company that makes those FICO scores, Fair Isaac Corp, saw their share price drop 27% this morning.

And I'm not sure if everyone knew that there is an acronym at play here with FICO.

Emily Milliron (1:27)

I certainly did not.

John Coteau (1:28)

I was not aware of it. But the drop came afterward from the government that the FICO score would be getting some competition when evaluating customers looking to take out a mortgage. Federal Housing Finance Agency Director Bill Pulte posted on X that mortgage giants Fannie Mae and Freddie Mac would move to a single pricing grid that includes Vantage Score, a FICO competitor. Fannie and Freddie support about 70% of mortgage markets for a decade.

FICO was the only credit score they accepted for borrowers seeking financing.

Emily Milliron (1:59)

Yeah, John, the announcement was paired with word from Rocket Mortgage that the lender would begin accepting Vantage Score as its preferred model. With Rocket Mortgage CEO Jay Bray saying, competition is healthy, especially when it can lower costs and expand responsible access to home ownership.

John Coteau (2:16)

All right, so who is Vantage Score? It's a joint venture of the three credit bureaus, Equifax, TransUnion and Experian. It was founded in 2006 as an alternative to FICO, but it's taken 20 years and multiple iterations to get this approval.

Emily Milliron (2:30)

Broadly, this move can be seen as a way to lower costs for home buyers at a time when mortgage rates are hovering at 7%, which we've talked about extensively here. Rocket Mortgage said that in its testing, it found that more customers qualified for loans using the Vantage Score model, and it saved an average of $1,600 at closing.

John Coteau (2:48)

Right, which is quite a bit of money. Here's the thing, though, suddenly more customers are qualified for loans. We've seen this problem before. And I read a host of analysts today expressing concern that the new system could corrode the integrity of credit scoring in general, with one analyst at Tady Cohn expressing it directly, quote, our longer term worry is that this creates an incentive for FICO and Vantage to compete on producing scores that result in the lowest loan level price adjustment, rather than on the risk of default. We do not see how this benefits housing.

Emily Milliron (3:22)

Yeah, there's always been some alchemy around credit and these scores. I had one of those retail credit cards for a particular makeup store, and I hadn't used it in a couple of months. I moved, I missed a few bills, I wasn't checking my account because, candidly, I wasn't using the credit card. And because I missed a $1 interest rate charge three months in a row, it really knocked my credit score probably around 100 points, and I made some calls, I was trying to get to the bottom of it. It's ambiguous, like, who controls this number, and if something goes wrong, how can you fix it? There's not a lot of clarity there.

John Coteau (3:57)

Yeah, exactly. I had the same situation where I had a medical bill that was just a small amount of money, just an unpaid copay, that just I moved, same thing, and forgot about it. And it can become a full-time job to keep these things out of collections. And I think about this, not to mention, every time there's a data breach, you get these letters in the mail or an email saying, Oh, you shopped at this place, there's a data breach, or use them, it signs you up for three to six months of credit monitoring. I don't even know what that means. Like, I feel at this point, it's been so common for my information to be leaked.