FICO is teaming up witb LexisNexis Risk Solutions and Equifax to use alternative data to identify creditworthy individuals who would otherwise be unlikely to obtain traditional credit. Card issuers will be able to use the alternative score without having to “rip and replace” existing systems, significantly lowering the cost and accelerating time to market.
The pilot program underway allows 12 of the largest credit card issuers in the U.S. to use alternative data to identify creditworthy individuals who would otherwise be unlikely to obtain traditional credit.
Based on extensive research, FICO’s data scientists found that alternative data such as property records, telecommunications and utility information can reliably be used to score 15 million consumers who do not have enough credit data to generate FICO scores. By using alternative data from LexisNexis and Equifax, FICO will give card issuers a FICO® Score that complies with relevant regulations that they can use to extend credit responsibly to millions of additional people.
The data used in FICO’s pilot program includes telecommunications and utility bills from Equifax as well as property and public records from LexisNexis. This new FICO Score is engineered to work alongside existing FICO Scores.
FICO is planning to complete the pilot program in the coming months, and expects to make the score based on alternative credit data available to more lenders later this year.
Equifax organizes and assimilates data on more than 600 million consumers and 81 million businesses worldwide.
FICO provides analytics software and tools used across multiple industries to manage risk, fight fraud, build more profitable customer relationships, optimize operations and meet strict government regulations.
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