Safety & Soundness
America’s $12+ trillion-dollar mortgage industry relies on trust, stability, and liquidity. The glue that holds these all together? FICO - For safety and soundness in the housing market, America counts on FICO.
Why Sound Practice Matters
To produce a credit score that is reliable and predictive, FICO relies on quality data standards that it has refined over decades. And we know what’s at stake. A consumer’s ability to get a car loan or a mortgage, hinges on the lender’s ability to accurately assess risk.
FICO recognizes the need to rapidly develop innovative scoring solutions combining traditional credit bureau and new alternative data and the potential this has to help solve the global financial inclusion challenge. Our data standards play an important role in ensuring the robustness and accuracy of our credit scoring system, and by extension, the stability and soundness of millions of lending decisions every day.
In order to increase the number of credit scores delivered, some have moved to weaken scoring standards by relying on sparse or old data. But if reliability goes down, risk goes up. This cutting-corners approach would undermine the soundness of scoring overall.
We have a better solution. We’re responsibly using new, alternative data sources that allow us to give reliable FICO® Scores to people who can’t be scored using credit bureau data alone.
From the blog
FICO Fact: Can unconstrained AI/ML expand access to credit?
FICO Fact: Does FICO’s Minimum Scoring Criteria Limit Consumers’ Access to Credit?
