Fair Isaac Moves to Protect Lenders from Fraudulent Manipulation of Authorized User Credit Card Accounts
Company’s Newest FICO Scoring Model Will Ignore Authorized User Accounts When Calculating Classic FICO Credit Risk Scores
MINNEAPOLIS--(BUSINESS WIRE)--Fair Isaac Corporation (NYSE:FIC) today announced that it will adjust its FICO® scoring formula to ensure the continued reliability and predictive power of FICO scores. This action is intended to protect lenders and FICO scores from abuse of authorized user credit card accounts by a new kind of credit repair service that sells consumer credit card histories to credit applicants in order to purposefully misrepresent the applicants’ own credit history to lenders and other businesses. The adjustment removes authorized user accounts from consideration by the scoring model in FICO 08, the newest version of the Classic FICO credit score which Fair Isaac expects to become available to lenders starting in September.
“We will do whatever it takes to protect the reliability and accuracy of FICO credit scores for lenders, and to ensure lenders can continue to use FICO scores with confidence when making their most important customer decisions,” said Dr. Mark Greene, CEO of Fair Isaac. “We will continue working with lenders, regulators and others in the credit reporting industry to end deceptive practices that fraudulently misrepresent consumer credit histories for profit.”
An authorized user is a person permitted by a credit account holder to use an account, typically a family member who is managing credit for the first time. Used legitimately, authorized user account information has helped both lenders and consumers by enabling lenders to use FICO scores when making credit decisions for consumers who are starting a credit history. Fair Isaac’s research indicates that the next version of its FICO scoring formula will deliver increased predictive power without considering authorized user accounts.
Fair Isaac will work closely with lenders to help them implement and benefit from the FICO 08 score as it becomes available. As the company announced previously, lenders will be able to use the new version of FICO scores with minimal changes to their own operating systems. To make lender adoption easier and faster, the new scoring model will retain the same scoring range, score reason codes, minimum scoring criteria, inquiry treatment, and related model parameters as previous versions of the FICO formula.
About Fair Isaac
Fair Isaac Corporation (NYSE:FIC) combines trusted advice, world-class analytics and innovative applications to help businesses make smarter decisions. Fair Isaac’s solutions and technologies for Enterprise Decision Management turn strategy into action and elevate business performance by giving organizations the power to automate more decisions, improve the quality of their decisions, and connect decisions across their business. Clients in 80 countries work with Fair Isaac to increase customer loyalty and profitability, cut fraud losses, manage credit risk, meet regulatory and competitive demands, and rapidly build market share. Fair Isaac also helps millions of individuals manage their credit health through the fair Isaac website.
Fair Isaac Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this press release that relate to Fair Isaac, including statements regarding its FICO® score, and the relationship described herein, and the benefits to be derived from the offering, 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 any unforeseen technical difficulties related to the implementation, use and functionality of the offering, the risks that customers will not perceive material benefits from the offering, failure of the product to deliver the expected results, the possibility of errors or defects in the offering, regulatory changes applicable to the use of consumer credit and other data, and other risks described from time to time in Fair Isaac’s SEC reports, including its Annual Report for the year ended September 30, 2006, and quarterly report on Form 10-Q for the period ended March 31, 2007. Forward-looking statements should be considered with caution. If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, Fair Isaac’s results could differ materially from Fair Isaac’s expectations in these statements. Fair Isaac disclaims any intent or obligation to update these forward-looking statements.
Fair Isaac and FICO are trademarks or registered trademarks of Fair Isaac Corporation, in the United States and/or in other countries. Other product and company names herein may be trademarks or registered trademarks of their respective owners.
Fair Isaac CorporationInvestors/Analysts:John D. Emerick, Jr., 800-213-5542
investor@fairiasac.com
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Affordable homeownership is a goal that some families have a difficult time achieving. USDA Rural Development’s single family housing loan program, however, is an option that can help these families enjoy the benefits that homeownership brings to our society.How Rural Development Helped:
National Homeownership Week was celebrated across the state in June. At an event in Ingalls (Madison county), Indiana Lieutenant Governor Joe Kernan and State Director Bob White spotlighted a special mortgage financing partnership between the Indiana Housing Finance Authority and USDA that helps rural residents become homeowners. USDA Rural Development joined the Grandison family in Ingalls to highlight how USDA’s single family housing mortgage loan program can assist rural Hoosiers achieve the American Dream of homeownership.
Homeownership has long been recognized as a key component of the American Dream. Homeownership provides tremendous social and economic benefits to communities across the country. It strengthens the economy, builds communities, and for the individual family represents a powerful tool for building economic stability and self-esteem.
Pictured left to right: IHFA Executive Director Kimberly Green, State Director White, new homeowner Christi Grandison, and Lieutenant Governor Joe Kernan.
The Results:
Homeownership in the U.S has reached an all time high of nearly 67%. Homeownership in rural America has also reached an all time high of over 75%. This rate has increased partly due to important housing partnerships like the one that assisted the Grandisons.
Since its inception in 1949, USDA’s housing program has lent more than $50 billion to assist nearly 2 million limited income rural Americans become homeowners. This loan program also helps provide a strong foundation for America’s rural children as over 70 per cent of the loans have been made to households with children under the age of 18. In 2001, USDA Rural Development helped finance over 1,300 rural home loans in Indiana by providing nearly $85 million in mortgage assistance.
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Government Grants For First Time Home Buyers
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