Fair Isaac Corp. today extended its standard-setting FICO score to help lenders and other businesses better serve consumers who have minimal or no credit history on file.
This FICO score can tap non-traditional sources of consumer data to assess the credit risk of these consumers – such as recent immigrants, people with low incomes, recent widows and divorcees, and young adults.
While an estimated 160 million Americans have documented credit histories adequate for calculating classic FICO credit scores, an estimated 50 million consumers do not. Lenders in the mortgage, payment card, retail, telecommunications and related industries can now use FICO scores to better control their risk when extending credit opportunities to these consumers. Lenders also can easily integrate this score into existing decision systems.
Fair Isaac has developed a network of information sources for non-traditional credit data to enable it to design and calculate highly predictive credit risk scores for overlooked consumers. Predictive information considered in the formulation of this score includes payment performance data on financial activities such as deposit accounts, pay-day loans and product purchase payment plans. Until recently, such information has not been consistently maintained or accessible for commercial risk scoring.
“Certain segments of the U.S. population are experiencing rapid growth, largely through immigration,” said Josh Kessler, manager of research at Purchase Street Research. “These segments’ growth creates a totally new market for financial services institutions. Lenders are very interested in reaching out to this market, both to grow their customer base and to satisfy growing pressure in the form of programs like the Community Reinvestment Act.”
This score is immediately available and businesses can obtain registration information to purchase these scores directly from Fair Isaac’s business and consumer portal Web site at www.myFICO.com/Business. The company has established a fully regulatory-compliant subsidiary, Fair Isaac Credit Services Inc., to operationally deliver this capability.
Fair Isaac Corp. (NYSE: FIC) provides predictive modeling, decision analysis and consulting services.
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