FICO Score
FICO Score is a credit scoring model developed by the data analytics company, FICO (Fair Issac Corporation). Similar to other credit scoring systems, FICO Score's algorithm uses debt data from an individuals credit report to formulate the score.[2] The score is used as a metric for lenders to determine whether or not to an individual is a credit risk or not.[3]FICO is currently the most widely used credit scoring algorithm in The United States of America. Particularly, FICO 8, the eighth version of the FICO score is used by the three main credit bureaus in the United States. Commonly referred to as the "big three" they are Experian, TransUnion, and Equifax.[4]
Contents
FICO
About
FICO is a data analytics company that serves its corporate client base by assisting their business decisions. In addition to their most well known product FICO Score, the company also has other software tools that are used to improve customer relations and optimize business interactions. Following suit with other Big Data corporations, FICO utilizes technologies such as cloud computing and open source standards.[5]
FICO operates globally in over 20 countries spanning six continents. The corporation provides solutions in an array fields such as finance, health care, automotive, telecommunications and more.[6] [7]
History
Founded in 1956 by engineer Bill Fair and mathematician Earl Isaac with hopes to improve the manner in which businesses make discussions. Two years later, the company released their first credit scoring algorithm. FICO moved their headquarters from San Fransisco, California to San Rafael California i 1961. In 1972 FICO debuted the first automated application processing system at Wells Fargo. FICO revealed another credit scoring model the FICO Credit Bureau Risk Score in 1981. The next year, FICO opens its first international office in Monaco. In 1987 FICO becomes a publicly traded stock in the New York Stock Exchange. FICO moved its headquarters again to Minneapolis, Minnesota in 2004. In 2013, FICO returned its headquarters to California by moving to San Jose. [8]
Algorithm
History
Breakdown
Scoring Range
Competitor algorithms
Discrimination concerns
Racial bias
Debt discrimination
Employment
Medical Debt
Education Debt
Inaccuracies
Credit invisibility
Predicting risk
Big data and artificial intelligence
Morality
Transparency
See also
References
- ↑ Fair Issac Corporation. (2018). Frequently asked questions about FICO scores. Retrieved January 28, 2022, from https://www.ficoscore.com/ficoscore/pdf/Frequently-Asked-Questions-About-FICO-Scores.pdf
- ↑ Fair Issac Corporation. (2021, October 27). How are FICO scores calculated? myFICO. Retrieved January 28, 2022, from https://www.myfico.com/credit-education/whats-in-your-credit-score
- ↑ FINRA. (2015, January 9). How your credit score impacts your financial future. How Your Credit Score Impacts Your Financial Future | FINRA.org. Retrieved January 28, 2022, from https://www.finra.org/investors/personal-finance/how-your-credit-score-impacts-your-financial-future#:~:text=A%20credit%20score%20is%20usually,the%20time%20of%20your%20application.
- ↑ University of Illinois Credit Union. (2022, January 14). Your credit score is the most important score you should know. U of I Community Credit Union. Retrieved January 28, 2022, from https://www.uoficreditunion.org/your-credit-score-is-the-most-important-score-you-should-know/
- ↑ Fair Isaac Corporation. (n.d.). About Us. FICO. Retrieved February 8, 2022, from https://www.fico.com/en/about-us
- ↑ Fair Isaac Corporation. (n.d.). About Us. FICO. Retrieved February 8, 2022, from https://www.fico.com/en/about-us
- ↑ Fair Isaac Corporation. (n.d.). Contact us. FICO. Retrieved February 8, 2022, from https://www.fico.com/en/contact-us
- ↑ Fair Isaac Corporation. (n.d.). FICO history. FICO. Retrieved February 8, 2022, from https://www.fico.com/en/history
