FICO adds consideration of account activity to the credit scoring mix

Greetings credit union people, with a special shout-out to the attendees of the Volunteer’s Conference.

What has caught my eye this morning is this article from the Wall Street Journal reporting that Fair Isaacs is rolling out a significant addition to its FICO credit score system. It’s the latest example of how big data analytics has the potential to remake traditional lending model as statisticians get a better feel for how non-traditional consumer attributes can be used to predict whether someone is a good or bad credit risk.

Starting next year, the company will start offering the “UltraFICO Score.” According to the Wall Street Journal, the Pentagon Credit Union is going to be the first users of this new framework. With a consumer’s consent, FICO will now consider a consumer’s checking and savings account transaction history as part of the process of generating a person’s credit score. According to the company, the product will be used as an option for consumers who do not have a sufficient credit history to be “score-able” or who want to recalibrate their existing credit score if they are near credit score cutoffs.


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