FICO score: revision of credit risk assessment

The data -based credit risk assessment helps the lenders to make decisions that are faster, more precise and fairer. One of the most frequently used tools in this area is the FICO score, which has long served as the standard for credit assessment.

The FICO score 10 t uses trend data to evaluate a person's loan behavior for more than two years. This historical perspective improves the predictive accuracy and helps the lenders to make more informed decisions Julie May (Image on the left), Vice President and General Manager for B2B scores at Fair Isaac Corp., known as Fico.

“The FICO point number is unique for each individual in terms of algorithm, but it is shown separately by each individual by making its abilities and your willingness to repay debts,” said May. “We find that our customers are interested in our recent and largest number of points, FICO 10 T in FICO 10 for trend data. The mortgage due to the non -compliant mortgage loans of 10 T. We have about 30 lenders who already use.

May and Ethan Dornhelm (right), Vice President for Scores and Predictive Analytics at Fico, spoke to Thecube's Rob Stechay at Fico WorldDuring an exclusive program on TheCube, Siliconangle Media's Livestreaming Studio. They examined how the FICO score continues to influence financial access through data-controlled credit skills. (* Disclosure below.)

How the FICO score changes to reflect the real behavior

The FICO score develops to take into account new types of credit data, including buy now, later services. With other available data analysis options, these additions are intended to improve fairness, efficiency and general decision -making according to May.

“Ultimately, lenders always look for further information to make better decisions so that they can give their customers recognition,” she said. “Ultrafico, that uses the permission of consumers and [demand deposit accounts] Data to actually provide another lens from borrower willingness to credit. We will accept and add FICO models to a proprietary treatment in order to discuss the purchase and pay later information that is delivered via the loan offices. Why this is important is [that] We have now seen incredible growth of using purchase, later pay as a loan vehicle, we see consumers who use it. “

The FICO point number plays a central role in the credit landscape as a standardized measure of consumer credit. Dornhelm emphasized that a strong score can open better financial opportunities and cheaper credit conditions.

“I would say that one of the possibilities of how we want to look at the risk of consumer credit with the average national FICO score,” he said. “It makes sense to use the common language of the credit risk in the United States. 90% of the top lovers use it. What we saw through the pandemic … We actually saw a significant increase in the average score.

Here is the complete video interview, part of the reporting of Siliconangle and Theecube Fico World:

https://www.youtube.com/watch?v=mccarh9fkek

(* Disclosure: Thecube is a paid media partner for Fico World. Neither Fico, the sponsor of the event reporting from TheCube, nor other sponsors have editorial control over content via Theecube or Siliconangle.)

Photo: silicon angle