- Posted by Tom Quinn, FICO® Score Product Manager
A comparison of nationwide FICO® Scores from 2008, 2009 and 2010 indicates that consumer credit risk has increased over the past two years. The distribution of FICO Scores drifted down slightly on FICO’s 300-850® score range and score performance shifted in response to changing economic conditions.
On the high end of the FICO® Score range, nearly 19 percent of consumers had scores between 800-850 in April 2008. That figure dropped to less than 18 percent by April 2010. On the lower portion of the FICO Score range, approximately eight percent of consumers had FICO Scores between 500-549 in April 2008. That percentage climbed to nine percent in April 2010.
A bright spot in the data is that the downward migration of FICO® Scores slowed between April ’09 and April ’10. In fact, the 750-799 range stabilized from April ’09 to April ’10; it includes over 19 percent of consumers. FICO’s analysis of the FICO® Score distribution was based on a nationwide sample of consumer credit data from Equifax, Inc.
These changes aren't surprising, given the economic impact on consumers. In general, the FICO® Score distribution is relatively stable at a national level.
Monitoring and tracking FICO® Score distributions can provide lenders with insights into emerging trends indicative of higher risk (or opportunities!) and adjust strategies appropriately.