Rachel Bell

According to a new report from the Australian Retail Credit Association (ARCA), 62% of Australians fully support the country's newly introduced credit reporting system—which, for the first time, will consider positive credit behavior. The favorable reaction by Australians is hardly surprising. The previous negative-only reporting system often punished consumers.…

As the UK economy continues to improve, lenders are increasing lending again — in a survey that FICO will announce next week, 100% of UK risk managers who responded said that lending more to consumers was a priority for 2014, and 27% said it was a top priority. At the same time, lenders are cautious about taking on additional risk. This is what makes the FICO^® Credit…

The ability to pay provision continues to be one of the biggest compliance hurdles of the Credit CARD Act. Many lenders have approached this as a purely “check-the-box” task, hoping to comply with minimal impact to existing processes. Instead, is it possible to not only comply, but also gain value in the process? We’ve been working with clients to do just that—in ot…

Our FICO Labs team has taken a fresh look at national distribution of FICO^® 8 Scores. With a couple of interesting exceptions, we found that consumer scores are continuing their slow return to a pre-recession pattern.  The first two years of the recession (2008-2009) moved the scores for millions of people into the lowest (300-499) and the highest (800-850) segm…

My colleagues in FICO Labs monitor FICO^® Scores and how they move over time. In our most recent review, we continue to see the effects of consumers’ scores moving up AND down. At the high end of the score distribution, the number of consumers in the 800-850 range is at its highest level since October 2008. Some 18.3 percent of consumers have FICO^® Scores in this ra…

More than ever, consumers are interested in their credit scores and credit reports. They ask questions when banking, paying bills online and shopping for a loan. This puts pressure on lenders to equip their employees with good answers to such questions. (myFICO.com is one source for those answers.) Unfortunately, this work is made tougher when credible sources get eve…

Last month I posted that the national distribution of FICO^® 8 Scores has had two major shifts during the recession. Some readers were puzzled that the observed shifts weren’t significantly larger, in light of the sour US economy. Actually, what appear to be small national shifts are quite dramatic changes, in FICO’s experience. The reality is that, despite all t…

This week, hundreds of credit counseling executives gathered in San Francisco for the annual leadership conference of the National Foundation for Credit Counseling. I participated on a panel to address what The New Credit Normal promises for consumers. As I explained, regulators are helping to empower consumers by having creditors include the underlying credit scores…

A comparison of nationwide FICO^® Scores from 2005-2011 illustrates that score distribution has remained relatively stable at a national level. However a close look at the numbers suggests that U.S. lenders have experienced two distinct phases of consumer credit risk in the recession thus far. Early in the recession, lenders saw a sizeable increase in the number of con…

In a recent joint “TweetChat” with Bankrate.com, we fielded hundreds of questions from participants on the specifics of a FICO^® Score. Their questions ranged from basic to complex, reminding us that as consumers become more credit savvy, the complexities of the FICO Score can still be confusing even to a student of credit. Here are some of the most popular questions…

Recently I blogged about common FICO^® Score myths. Here’s another widespread misconception: People believe that their credit scores should improve when a credit card account is closed. Not true. In all likelihood, closing a revolving credit account either will not affect the FICO^® Score at all, or it will cause the score to drop slightly. The myth seems to be b…