FICO Suite 10 Brings New Precision and Flexibility to Credit Scoring Decisions

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FICO announced this week that its latest credit risk solution FICO Score 10 Suite will be available to lenders via the U.S. credit reporting agencies this summer. The new technology leverages trended credit bureau data to boost its predictive power, enabling lenders to make more precise decisions on credit risk.

The company said that the new Score 10 Suite could reduce the number of defaults in a lender’s portfolio by up to 10% for newly originated bankcards, and 9% among newly originated auto loans versus the previous, FICO Score 9. The new solution performs even better with newly originated mortgage loans, the company added, with a 17% reduction in defaults.

“FICO is a cornerstone for consumer lending decisions,” Jim Wehmann, executive vice president for Scores at FICO said. “We continuously innovate using the latest, most robust data, while maintaining consistency with previous models to ensure backward compatibility and minimize operational changes required to adopt a new score.”

The company is touting the use of trended data as one of the key enhancements of the new technology. Trended data provides a historical view of data like account balances which gives lenders a more complete understanding of how an applicant manages their finances. At the same time, FICO Score 10 maintains FICO Score minimum scoring criteria, and features backwards compatibility with previous versions of FICO Score. This helps ensure that lenders experience a seamless transition to the new offering with maximum ease of use and stability.

In addition to the emphasis on trended data, the new scoring regime also takes an interest in personal loans that the applicant may have. The increasing use of personal loans, to pay down credit card debt for example, has grown in recent years. MarketWatch noted earlier this week that personal loans are the fastest-growing debt category in the U.S. The takeaway is that FICO Score 10 will make it easier for those who are managing their finances well to avoid being penalized for instances when debt might spike due to a large, single-instance purchase. Meanwhile, those who are adding debt (personal loan, home equity loan, etc.) as a strategy to manage their debt may find the new scoring criteria more challenging.

FICO closed out 2019 with the release of two new products and an acquisition. In November, the company launched FICO Identity Proofing, a digital onboarding solution; and FICO User Authentication, a set of multi-factor authentication functionalities. Both new solutions were made possible by the company’s acquisition of security access provider EZMCOM that month.

An alum of our developers conference, FinDEVr New York 2016, FICO was founded as Fair Isaac Corporation in 1956. The company is based in San Jose, California.