MINNEAPOLIS—July 27, 2010— FICO (NYSE:FICO), the leading provider of analytics and decision management technology, today announced that its FICO® 8 Score, used for consumer credit risk assessment, has been adopted by more than 2,500 banks and financial institutions. This widespread market adoption occurs as lenders continue to benefit from the enhanced predictive analytics of the new score.
Recent validations quantify the returns lenders can expect from integrating the FICO® 8 Score into loan originations and customer management decisions. In a newly published validation by a major U.S. bankcard issuer, the FICO 8 Bankcard Score resulted in a gain of up to $5.5 million on 2 million newly booked credit card accounts. This is an area of keen focus, as the ability to more accurately identify each consumer’s risk will help bankcard issuers grow their card portfolios responsibly.
In another top bankcard issuer’s study, using the FICO® 8 Score for account management across the issuer’s entire card portfolio would produce an estimated $12 million in net new profit. The new score will assist the lender in segmenting their customer base for cross-sell promotions and credit line increases.
FICO’s own studies show that the FICO® 8 Score improves credit risk prediction by up to 15% over earlier FICO Score models, helping lenders make better decisions across the credit lifecycle while reducing default rates on consumer loans. The strongest improvements in risk prediction are achieved in key segments such as consumers who are opening new accounts and those who have a blemished credit history. In addition, this newest generation of FICO credit risk scores includes refinements to help lenders better evaluate consumers who are comparatively new to credit.
“We’ve observed a continuous growth in FICO® 8 usage since the new score became available at all three national credit agencies in July 2009,” said Robert Duque-Ribeiro, vice president and general manager of Scores for FICO. “As the pool of prime candidates decreases, lenders need more precise segmentation in order to control losses and maximize profitability from their card and loan portfolios. In a tough lending environment, FICO 8 is a critical tool for lenders to improve risk evaluation and loss avoidance.”
“With the auto industry showing signs of recovery, we felt it important to have the most precise risk evaluation tools available in the market today to assess new loan originations,” said Mike Andra, director of Pricing and Credit Risk Analytics for Santander Consumer USA Inc. “By leveraging the most predictive FICO® Score tailored to auto finance, Santander Consumer USA is positioned to responsibly grow our Auto portfolio.”
Since its introduction 20 years ago, the FICO® Score has become the standard measure of US consumer credit risk, across the retail banking, mortgage, credit card, auto lending and retail industries. Today FICO Scores are in use at more than 90 of the 100 largest U.S. financial service institutions. To meet global demand, the FICO Score is also available to lenders in 20 countries on five continents.
FICO (NYSE:FICO) is the leader in analytics and decision management technology, transforming business by making every decision count. FICO combines trusted advice, world-class analytics, and innovative applications to help businesses automate, improve, and connect decisions over customer lifecycles and across the enterprise. Clients in 80 countries work with FICO to increase customer loyalty and profitability, reduce fraud losses, manage credit risk, meet regulatory and competitive demands, and rapidly build market share. FICO also helps millions of individuals manage their credit health through its consumer website, www.myFICO.com.
Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Decision Management strategy and reengineering initiative, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2009 and its last quarterly report on Form 10-Q for the period ended March 31, 2010. If any of these risks or uncertainties materializes, FICO’s results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.
FICO is a trademark or registered trademark of Fair Isaac Corporation in the United States and in other countries.
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