FICO® Economic Impact Index (patent pending) helps you make credit risk decisions that adjust to anticipated changes in macro-economic conditions. This analytic, scientifically combines two types of external risk: credit bureau data from the FICO® 8 Score, with macro-economic data to predict how consumer risk levels are likely to change with projected market conditions. Use it to capture positive growth by relaxing credit policies when economic indicators signal a recovery. Use it during declining economic conditions to better control your exposure by making timely, efficient adjustments to scoring thresholds. Key Benefits
- Gain more insight and precision from stress testing
Explore how much expected default rates are likely to shift under various economic scenarios. Project portfolio risk and loss, and estimate capital and reserve requirements, with greater precision.
- Bring a broad range of economic factors to bear on credit decisions
Base marketing, originations and customer management decisions not only on the expected default rate historically associated with a consumer's FICO® Score, but on how economic conditions could change that expected default rate.
- Act ahead of upturns for competitive advantage
Loosen credit policies sooner, and the right amount for each risk level, as the economy recovers. Identify segments likely to show the most improvement in default rates, and focus incentives on them before your competitors do.
- Act ahead of downturns to limit losses
Tighten credit policies sooner, and the right amount for each risk level, in economic recessions. Identify segments where default rates are likely to rise most steeply, and take stronger action there to control risk exposure.
Feature Highlights
- Quantifies relationships between macro-economic factors and credit risk
FICO® Economic Impact Index predicts the impact changes in macro-economic factors, such as GDP, unemployment and housing prices, are likely to have on default rates. Delivered as a set of metrics indicating the degree and direction (positive or negative) of the predicted shift for FICO® 8 Scores
- Generated for six future scenarios, with economic forecasts driven by Moody’s Analytics, Inc. By selecting from up to six economic scenarios, you can apply the metrics that most closely match your company's own view of where the economy is headed. Use the other scenarios to understand the range of likely outcomes if the economy behaves differently from what you expect.
- Updated quarterly
Using this consistent set of metrics, refreshed every three months, you can maintain more consistent risk exposure. For example, the index indicates how much you would need to raise score cutoffs to generate stable default rates in a mild, moderate or severe recession.
- Easily available as an option with your current FICO® 8 Score capture process
FICO® Economic Impact Index is available through Equifax in both online mode (for originations and ad-hoc decisions) and offline batch mode (for prescreening and account management decisions as well as historical testing). It is also available through the FICO PreScore® Service. Key Benefits
- Gain more insight and precision from stress testing
Explore how much expected default rates are likely to shift under various economic scenarios. Project portfolio risk and loss, and estimate capital and reserve requirements, with greater precision.
- Bring a broad range of economic factors to bear on credit decisions
Base marketing, originations and customer management decisions not only on the expected default rate historically associated with a consumer's FICO® Score, but on how economic conditions could change that expected default rate.
- Act ahead of upturns for competitive advantage
Loosen credit policies sooner, and the right amount for each risk level, as the economy recovers. Identify segments likely to show the most improvement in default rates, and focus incentives on them before your competitors do.
- Act ahead of downturns to limit losses
Tighten credit policies sooner, and the right amount for each risk level, in economic recessions. Identify segments where default rates are likely to rise most steeply, and take stronger action there to control risk exposure.
Feature Highlights
- Quantifies relationships between macro-economic factors and credit risk
FICO® Economic Impact Index predicts the impact changes in macro-economic factors, such as GDP, unemployment and housing prices, are likely to have on default rates. Delivered as a set of metrics indicating the degree and direction (positive or negative) of the predicted shift for FICO® 8 Scores
- Generated for six future scenarios, with economic forecasts driven by Moody’s Analytics, Inc. By selecting from up to six economic scenarios, you can apply the metrics that most closely match your company's own view of where the economy is headed. Use the other scenarios to understand the range of likely outcomes if the economy behaves differently from what you expect.
- Updated quarterly
Using this consistent set of metrics, refreshed every three months, you can maintain more consistent risk exposure. For example, the index indicates how much you would need to raise score cutoffs to generate stable default rates in a mild, moderate or severe recession.
- Easily available as an option with your current FICO® 8 Score capture process
FICO® Economic Impact Index is available through Equifax in both online mode (for originations and ad-hoc decisions) and offline batch mode (for prescreening and account management decisions as well as historical testing). It is also available through the FICO PreScore® Service. Back To Top
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