Ethan Dornhelm

The FICO^® Score is the lingua franca, or common language, for the credit scoring industry. It serves as a broad-based, independent standard measure of credit risk. It is relied upon by stakeholders across the entire lending ecosystem – from regulators, investors and boards to consumers, lenders, and brokers – as a baseline metric for assessing credit risk th…

The data is in, and the average U.S. FICO^® Score now sits at 711. This is 5 points higher than the average score just a year ago, and is likely to be viewed as a surprise result in light of the impacts that the COVID-19 pandemic has had on U.S. consumers and the global economy.  Those surprised by this latest figure may have thought that the FICO^® Score is an…

As noted futurist Faith Popcorn said (all the way back in 1991): “You can trust a crystal ball about as far as you can throw it.” With respect to what is next for the global economy, everybody’s crystal ball seems cloudy at the moment.  While we at FICO do not claim any unique foresight into what is ahead for the U.S. economy, we are well positioned t…

As the ripple effects of the COVID-19 pandemic continue to spread throughout the economy, many lenders are offering loan forbearance or deferred payment agreements to impacted consumers. Lenders have introduced or expanded options for entering into these payment programs, through which consumers are granted temporary relief from making payments on loans ranging fro…

Look around. How many people do you know that already have the iPhone 11? Many consumers seem to always have a device that is in lockstep with the latest in cutting edge technology. These consumers are a large part of the reason why Apple releases new versions of their phone on a regular cadence. By doing so, they ensure that their product offering captures the latest…

A few weeks ago, we announced that the average U.S. FICO^® Score as of April 2019 is now 706, some 20 points higher than the national average score back in April 2009.  Key drivers of this trend are the steady economic growth experienced over this period, as well as improved financial behavior driven by consumer awareness of their FICO^® Scores. An interesting a…

The latest data is in, and the average U.S. FICO^® Score now sits at 706.  Since bottoming out at 686 in Oct 2009, there have been nine consecutive years of increases in the national average FICO Score. The key driver of this trend is the improved consumer financial health that has resulted from the steady economic growth that the U.S. has experienced since the…

A recent Bloomberg article asserted that “consumer credit scores have been artificially inflated over the past decade,” as credit scores have steadily increased over the past decade of economic expansion.  The conclusion cited is that “debtors are riskier than their scores indicate because the metrics don’t account for the robust economy, skewing perception of bo…

After a 2018 that had its highs and lows, what might 2019 have in store from a credit risk management standpoint?  Here are four key developments in credit scoring that we will be keeping an eye on in the new year: Consumer-Contributed Data Takes Center Stage Momentum is high in the consumer-contributed data space: consumers are getting more comfortable wit…

  "There are three kinds of lies: lies, damned lies, and statistics" - Attributed to Benjamin Disraeli, British PM (1874-1880) In assessing the predictive value of new scores or new data, significant weight is given to model performance measures.  Examples of these measures — which quantify the effectiveness of a predictive model in distinguishing…

Greetings from sunny (and humid) Miami!  I had the pleasure of speaking on a panel at ABS East yesterday, entitled “Traditional vs Non-Traditional Underwriting, Does Machine Learning Teach Us Anything New?” The panel primarily focused on the opportunities and challenges associated with the use of Machine Learning (ML) in credit underwriting.  I called out…

In July 2017, I wrote about the average U.S. FICO^® Score hitting a milestone of 700, indicating that consumer credit and financial health continue to be strong. The momentum has continued, as the average FICO Score has risen again. For the first time, the average FICO Score in the U.S. has reached 704, showing a steady upward trend in U.S. credit quality. Since bot…