In a bold move that underscores growing concerns about the affordability of homeownership, Senator Josh Hawley has initiated an investigation into Fair Isaac Corporation (FICO), the leading name in credit scoring. The Missouri Republican's probe focuses on the company's pricing strategies and their impact on the mortgage market, particularly for first-time homebuyers.

On Monday, Senator Hawley sent a letter to FICO, expressing his intention to scrutinize the company’s recent price hikes for credit scores. He also reached out to the Federal Trade Commission (FTC), urging the agency to examine potential unfair competitive practices by FICO. This double-barreled approach highlights the senator's commitment to addressing what he sees as a critical issue affecting American consumers.

“These price increases are most damaging to the Americans who can least afford them," Senator Hawley stated in his correspondence with FICO, pointing out the disproportionate burden shouldered by first-time homebuyers. The letter, which POLITICO obtained exclusively, reveals the senator's concern over the strain these costs impose on individuals striving to own their first home in an already challenging market.

Furthermore, Senator Hawley, who chairs a Judiciary Committee subpanel, elaborated in his letter to the FTC that he wants the agency to “investigate unfair methods of competition and unfair or deceptive acts or practices.” He believes that the FTC is well-equipped to conduct a thorough investigation into FICO's practices, separate from his own inquiry.

FICO, known for selling its credit scoring algorithms to the three major credit bureaus—TransUnion, Equifax, and Experian—has not yet responded to the senator's allegations or his request for comment. These bureaus, which are also developing a competing model called VantageScore, play a crucial role in the credit reporting system that lenders rely on to assess homebuyers' loan eligibility.

Alarm over FICO’s pricing has been growing; last year, credit bureaus vocally opposed the steep price increases, which surged from 60 cents to $10 over the past five years. According to lenders, these costs can accumulate, potentially adding hundreds of dollars to the overall expense of a mortgage for homebuyers.

Senator Hawley's inquiry could potentially expand into a larger investigation by the Judiciary Committee into what he suspects are anticompetitive practices in the credit scoring market. He has requested a broad range of documents from FICO as part of his investigation, signaling a comprehensive review that could have significant implications for the credit scoring giant and the broader financial services industry.

As the investigation unfolds, it will be crucial to monitor how these probes might influence the practices of FICO and the broader credit reporting landscape, possibly leading to changes that could make homeownership more accessible and affordable for Americans.