A Data Scientist’s Guide to FICO World
FICO World 2014 is opening in San Diego next week. With more than 100 sessions presented by experts from more than 80 companies around the world, it might seem overwhelming. Whethe…
FICO World 2014 is opening in San Diego next week. With more than 100 sessions presented by experts from more than 80 companies around the world, it might seem overwhelming. Whether you’re an analytic scientist, a data wonk, a wannabe, or a tech-savvy business leader, there is something for everyone at FICO World. Below is our quick guide to help you navigate the leading international conference on analytics-powered customer engagement:
Riveting Keynotes
Wednesday kicks-off with keynotes from FICO CEO Will Lansing and Theresa Payton, former White House CIO, cybersecurity authority, identity theft expert and author of Privacy in the Era of Big Data. Both speakers will call on businesses to do more to protect customers’ data.
Thursday’s keynote features FICO CTO Stuart Wells, who will give attendees a sneak peak at some technologies and innovations under development, and Maribel Lopez, principal and founder of Lopez Research, enterprise mobility expert, and author of the forthcoming book, Right-Time Experiences: Driving Revenue with Mobile and Big Data.
Friday will conclude with a keynote panel discussion on the new age of analytics with chief analytics officers from Ford Motor Credit, Caesars Entertainment and Lithium Technologies, chaired by Dr. Andrew Jennings, FICO’s chief analytics officer.
Engaging Sessions
Running in parallel with the conference is the first-ever Decision Technology Forum. The Forum offers more than 20 sessions on how to accelerate development and deployment of analytic applications, implement smarter business decisions and take the best-possible action in real time. If you are dealing with Big Data, this Forum is right in your wheelhouse. You won’t want to miss the following sessions:
- Product Showcase: Revolution in Customer Engagement
- Product Showcase: Analytic Modeling in the Cloud
- Product Showcase: FICO Big Data Analyzer
- More Than a Numbers Game: Building Better Analytic Models
If you can pull yourself away from the Forum, be sure to check out the Analytic Innovation and Customer Growth and Retention tracks. We think you’ll like the following sessions:
- Big Data Analytics Case Study: CIBC
- Customer Loyalty on a Massive Scale
- Understanding Sentiment Analysis
- Addressing Attrition: Ultra-Dynamic, Multi-Dimensional Analytics
This fall, we’ve been previewing some of our favorite sessions to give you a taste of what to expect at FICO World. Here are a few you might be interested in:
- Explore the Future of Cybersecurity Analytics at FICO World
- FICO World Preview: Is Your Customer Engagement Compliant?
- FICO World Webinar: Text Analytics 101
If you are attending FICO World, we look forward to seeing you there. If you can’t make it, you can catch up on the comings and goings in the FICO Newsroom, this blog, as well as by following @FICOWorld and @FICO on Twitter, FICO.com/facebook and FICO.com/LinkedIn.
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FICO® Score High Achievers: Is Age the Only Factor?
<p>FICO’s latest research on <a href="http://www.fico.com/en/blogs/risk-compliance/us-credit-quality-rising-the-beat-goes-on/" target="_blank">national FICO® Score distribution</a> shows that US credit quality continues to trend upwards, with an increasing number of consumers scoring in the highest scores ranges. Given that, we decided it was time to refresh our study on “<a href="http://www.fico.com/en/blogs/risk-compliance/infographic-what-does-a-high-credit-scorer-look-like/" target="_blank">FICO® Score high achievers</a>,” where we examine the credit behavioural profiles of consumers with higher credit scores.</p> <p>As expected, our latest study showed that older people generally have higher scores, as has been the case in our <a href="http://www.fico.com/en/blogs/risk-compliance/age-before-beauty-credit-worthiness-before-youth/" target="_blank">past research</a>. This is largely because they have trade lines that have been open longer, which leads to higher scores (assuming the trade lines are in good standing and all other things equal). The most credit savvy among you will remember that length of credit history accounts for roughly 15% of the overall <a href="http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx" target="_blank">FICO® Score calculation</a>.</p> <p>But for younger consumers, it isn’t too helpful to say, “just wait until you are 50 years old, and that will fix things!” Thus, I decided to dive deeper with our analysis, including looking at the credit behavioural characteristics of younger consumers with high FICO® Scores.</p> <p>In this analysis, I looked at credit characteristics for the two highest score bands, 750-799 and 800-850, which have about 16% and 23% of the population, respectively. I further broke this down by looking at the characteristics of the youngest 15% in each group, which occurs at age 29 for the 750-799 group and 43 for the 800-850. We used FICO<strong>®</strong> Score 9 for our analysis, and examined typical variables of the categories that go into the make-up of the score.</p> <p><a href="http://www.fico.com/en/blogs/wp-content/uploads/2016/10/FICO-Score-High-Achiever-table.png"><img class="alignnone size-full wp-image-29367" src="http://www.fico.com/en/blogs/wp-content/uploads/2016/10/FICO-Score-High-Achiever-table.png" alt="fico-score-high-achiever-table" width="715" height="747" /></a></p> <p>Since there’s a lot to dissect in this chart, I’ll highlight a few findings that struck me: <ul> <li><strong>Credit history.</strong> Higher scores are undoubtedly associated with a longer time on file. What’s striking is the higher average time on file for the 800+ group, both overall and for revolving accounts (the most common trade line). Clearly, it helps to start credit use early in life – but that’s not the sole determining factor for high scoring. The younger cohorts in both the 800+ and 750-799 groups have time on file medians significantly less than their older counterparts.</li> <li><strong>New credit.</strong> High credit scorers do, in fact, pursue new credit. We see little variation in months since last trade line opening and last inquiry among all groups observed.</li> <li><strong>Pay on time.</strong> As you might expect, the further in the past the delinquency, the higher the score – and that’s <u>if</u> a delinquency ever happened. 95% of the 800+ people and 72% of the 750-799 group have never been delinquent, which is a striking contrast to the 57% for the total population. The percentages for the younger groups are even higher, especially so for the 750-799ers. Collection items are also scarce for these high scorers. While 23% of the national population have collection items greater than $99, the figures are only 0.5% for the 800+ group and 3% for the 750-799 group. It is clear that, in conjunction with starting a credit file early, paying on time is a key trait of the FICO® Score high achiever.</li> <li><strong>Balance and utilization.</strong> Finally, we look at how credit is being used, focusing on revolving product use. (Since most people only have one mortgage or one auto loan, variation in instalment product figures is minimal and driven by payment history, which is near perfect for high scorers, as we’ve seen.) FICO® Score high achievers tend to have more open revolving accounts. While the % active trades and utilization are generally lower, by no means do high scorers avoid the use of credit products. What drives the difference here is the amount of <u>available</u> revolving credit utilized. The 800+ group is roughly 1/4 of the national median, both in total and on their highest utilized card; they also have lower balances and more cards<em>. </em>The 750-799 group is more active and higher utilized, but still only at 2/3 of the national figures. The young 750-799 group compensate with lower revolving balances and, as a result, lower utilization, which is in line with what we see for the 800+ group.</li> <li><strong>Benchmarks.</strong> I’d like to point out that while this study provides good benchmarks of the typical credit traits of the FICO® Score high achiever, individual credit profiles will vary widely. And keep in mind that when we sort groups of consumers as a whole by different behaviours, some results may look superficially odd. For example, the 800+ band has a longer median average open account time (128 months) than average revolving months on file (140 months).</li> </ul> So, what do we conclude? A huge takeaway is that high scorers don’t have too much in the way of serious delinquencies and negative public record data.</p> <p>In most respects, the young 800+ people are like their peer group. They really only differ markedly in their shorter credit history and higher non-mortgage balance, both of which are a function of life stage. Our results show that you don’t have to be a credit product hermit; these high scorers have more credit cards. The takeaway is to start credit activity early and maintain well-managed and moderate usage.</p> <p>In many ways, the young 750-799 people are more interesting because their age profile is much younger. Their credit characteristics differ more from their peer group, particularly in terms of length of credit history. They compensate by having almost pristine credit records and lower balances.</p> <p>Ultimately, 39% of US consumers are FICO® Score high achievers, which they accomplish by following common-sense credit practices. It ain’t rocket science!</p>
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