We all purchase insurance policies for one fundamental reason – to protect against unexpected events. No one plans to have an automobile accident or to have a tree fall on their home, and insurance provides valuable peace of mind that, should significant unexpected events such as these occur, they don’t translate into financial hardships or major life disruptions. Len…

FICO will present key insights gained from recent FICO^® Resilience Index research and early lender adoption use cases across the consumer credit lifecycle at several key industry events starting later this month. FICO will also preview FICO^® Resilience Index 2, the latest advance in FICO’s groundbreaking product, with more precise insight about a borrower’s resilience…

If we think of a lending portfolio as a night club, its underwriting policy acts as the doorperson, checking IDs and making sure anyone trying to enter meets documented criteria. Most underwriting policies base acceptance on someone’s attributes and behavior at or before the time of application, considering how other similar applicants have behaved in the past. In bot…

Credit risk industry veterans who managed consumer loan portfolios through the Great Recession can recall the challenge of responding to swiftly changing borrower payment behavior and the resulting delinquency and default rate volatility during that time. Unable to pinpoint the sources of rapidly growing credit losses, lenders broadly and dramatically restricted acces…

When we launched FICO’s “Score A Better Future” program in October 2018, our main goal was to continue to expand consumer credit access through financial education. Our mantra, “Your FICO^® Score today doesn’t have to be your FICO Score in the future” still holds true today. These free events are designed to demystify credit and give consumers the tools – including non…

In 2020, FICO released two new versions of its FICO^® Score in the United States — the FICO^® Score 10 suite — to help lenders predict and manage credit risk: FICO^® Score 10 leverages the latest data and modeling methodologies, while remaining backward compatible with previous versions of the FICO^® Score FICO^® Score 10 T builds on the FICO^® Score 10 framework an…

I recently had the opportunity to participate in a virtual event hosted by the Urban Institute entitled Financial Inclusion: Lessons Learned and What’s Next for Innovations in Alternative Credit Data. While we are hopefully seeing light at the end of the tunnel after a year of a devastating pandemic, there is no doubt the economic impacts have been profound an…

Improved Driving Using Smartphone Telematics and Scoring Analytics  Every year there are approximately 1.35 million fatalities in traffic collisions worldwide. eDrivingSM, a leading global provider of digital driver risk management programs, has partnered with FICO to create scoring algorithms to capture driving behavior and develop a transformational predicto…

The FICO^® Resilience Index is a new analytic designed to rank-order consumers according to their resilience to a downturn in the economy. It is built to reveal “latent” credit risk that manifests during periods of economic stress by providing additional rank-ordering of credit risk within narrow FICO^® Score ranges. As the FICO^® Resilience Index is a powerful a…

Early in the COVID-19 pandemic, FICO data scientists discovered that the FICO^® Resilience Index was a strong predictor of the likelihood that consumers were receiving loan accommodations such as payment deferrals and forbearances following implementation of the CARES Act.   In the months following the early summer peak in loan accommodations, FICO analysts won…

At FICO, we are continuously innovating scoring products and services that create greater financial inclusion across communities and empower lenders’ decision making. We are a longtime leader in incorporating alternative data, which is typically not housed at the credit bureaus, to help expand credit access for consumers who are otherwise ineligible for a traditional…

The COVID-19 pandemic cast a huge shadow on the financial services worldwide. The FICO Blog posts last year reflected that – we wrote about everything from the impact on collections, proactive lender communications with consumers, issues with fraud, and of course, how FICO^® Scores were impacted. We hope that what readers learned helped instill confidence in keeping…