New Risk Score from Equifax-FICO Alliance Identifies Which UK Consumers Can Handle More Credit

LONDON — September 27, 2012 — Global information solutions leader Equifax and FICO, the innovative provider of analytics and decision management technology, today announced the release for the UK market of the FICO^® Credit Capacity Index™, built on Equifax’s market-leading risk score, Risk Navigator 4 (RN4). Research indicates that UK card issuers could safely extend more credit to 15 percent more consumers on average.

Capitalizing on FICO's patented analytic technology and Equifax's rich credit data and bureau characteristics on the UK population, the new solution from the Equifax-FICO alliance gives lenders a more effective way to assess a consumer's ability to manage additional credit. Issuers will be able to take a more forward-looking view of credit risk, enabling them to grow their customer portfolios without extending credit increases to consumers who will be unable to manage the additional debt.

Initial analysis shows that a sizeable number of UK borrowers could handle additional credit. FICO and Equifax forecast the effects of extending more credit using the FICO Credit Capacity Index with RN4 and found that the largest UK credit card issuers could safely lend to 15 percent more consumers on average, while maintaining current risk levels.

"We have tested the FICO Credit Capacity Index based on Equifax data, and we are impressed by the results," said Rick Odd, head of risk for Current Accounts and Credit Cards at HSBC. "This is precisely the kind of innovation the UK banking industry needs to pursue profitable growth and continue to further enhance their commitment to responsible lending. We are investigating how we could utilise this new metric in our lending strategies."

Adding profit per account
Validation on a nationwide sample of UK accounts showed that using the FICO^® Credit Capacity Index™ with Equifax’s credit risk scores to set initial credit lines would add about £2,5 of profit per account booked. A separate validation showed that a UK issuer using the Credit Capacity Index with Equifax RN4 for a credit line increase strategy could improve profit by more than £2 per account on that one line increase.

Using Equifax RN4 with Credit Capacity Index can help to identify apparently low-risk consumers who are more likely to experience difficulty managing additional credit. Similarly, the combination of the two scores can help lenders find consumers in higher-risk score ranges who have higher capacity and are likely to be responsible users of new credit, thereby creating growth opportunities.

Analysis shows that among low-risk consumers with the highest RN4 scores, those with the lowest Credit Capacity Indexes were 13 times more likely to default on a new loan than consumers with a high Credit Capacity Index.

"Lenders understand their responsibility to determine consumer indebtedness and affordability as well as meet the requirements for treating customers fairly," said Shawn Holtzclaw, managing director, Equifax UK. "But this must be balanced with the clear need for new credit to be extended in the UK market to facilitate growth. This innovative solution from Equifax and FICO combines the expertise of each organization to deliver a solution that is not possible from any single provider. By giving lenders a better understanding of each consumer's credit capacity, this product can play a vital role in freeing up capital to stimulate the UK credit market and economy."

Advanced analytics
FICO developed the Credit Capacity Index using a patented analytic technology known as Future Action Impact Modeling, which predicts the effect future actions would have on a consumer's credit risk. FICO has already launched the Credit Capacity Index in the US and other markets.

"We have empirically developed a metric that shows how a consumer's risk changes if they acquire new credit," said Mike Gordon, vice president and general manager for FICO in Europe, the Middle East and Africa. "The validation results for this score were strong and reinforce that this new combined solution from the alliance can be a game changer for enabling growth."

A series of webinars is planned for November 2012 to provide more information on how the new score could support issuers’ risk strategies. Details of the webinars, as well as information on the FICO Credit Capacity Index and the alliance’s other joint solutions, are available at www.efxfico.com.

About EQUIFAX (www.equifax.com)
EQUIFAX is a global leader in consumer, commercial and workforce information solutions, providing businesses of all sizes and consumers with information they can trust. We organize and assimilate data on more than 500 million consumers and 81 million businesses worldwide, and use advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.

Headquartered in Atlanta, EQUIFAX operates or has investments in 18 countries and is a member of Standard & Poor’s (S&P) 500^® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. For more information, please visit www.equifax.com.

Sobre FICO
FICO (NYSE:FICO), formerly known as Fair Isaac, delivers superior predictive analytics solutions that drive smarter decisions. The company's groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO's innovative solutions include the industry-leading solutions for measuring credit risk, managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world's top banks, as well as leading insurers, retailers, pharmaceutical companies and government agencies, rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands.

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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 plan, 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, 2011 and its last quarterly report on Form 10-Q for the period ended June 30, 2012. 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, Credit Capacity Index and “Make every decision count” are trademarks or registered trademarks of Fair Isaac Corporation in the US and other countries.