FICO Scores Drift Down as Economic Factors Weigh on Consumer Credit Risk

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MINNEAPOLIS, MN—July 13, 2010—A comparison of nationwide FICO® Scores from 2008, 2009 and 2010 indicates that consumer credit risk has increased over the past two years as 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.

"While these are small movements, they are important because even slight movements can impact loan portfolios," said Andy Jennings, FICO's chief research officer and head of FICO Labs, the company's research arm. "More interestingly, the performance of consumers at a given score has changed as the economy slumped. It's critical that lenders have analytic tools in place to understand how a score of, say, 700 will perform. Will it perform as a 700 performed last year? Will it be riskier? Banks must be able to anticipate how macro-economic factors such as GDP, unemployment, and housing prices will affect consumer credit risk."

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. For more information about trends in FICO Score migration, contact Jeff Scott for FICO at 408-884-4017 or

FICO is a trademark of Fair Isaac Corporation in the United States and in other countries.

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