The new “FICO 08” credit score will be available at all three national credit reporting agencies by the end of this month. Over 400 lenders have begun using or testing “FICO 08” scores, including five of the seven largest U.S. banks and four of the five largest credit card issuers. The strongest improvements in risk prediction over current FICO scores is achieved in key consumer segments such as those opening new accounts or having prior derogatory information. In addition, this newest generation of FICO scores includes refinements to help lenders better evaluate consumers who are comparatively new to credit. To streamline lendersâ conversion to the “FICO 08” score, the new model retains the same 300-850 scoring range, score reason codes, minimum scoring criteria, and inquiry treatment as previous versions of the score. In addition, “FICO 08” helps lenders protect against authorized-user account âpiggybackingâ by incorporating new patent-pending technology that materially reduces the potential score impact associated with the abuse of authorized user accounts.
A new forward-looking risk management tool has been unveiled that rank-orders consumers based on their ability to take on future debt. The new “Credit Capacity Index” was developed by Equifax and FICO.
It can provide value at different points across the credit account life cycle. The companies say that it can help credit card issuers avoid future credit defaults by predicting which cardholders can handle incremental debt if extended a higher credit limit. FICO optimized the “CCI” to be used in tandem with “BEACON 09” credit scores. Used together, “CCI” and “BEACON” can help lenders differentiate consumers who present the same repayment risk on their current obligations but vary in their capacity to assume new debt or incremental credit balances. The new tool is available through Equifax.
Predictive analytics provider FICO has launched the “Falcon Fraud
Manager 6.0.”It is the first payment card fraud management solution to
adaptive analytics, an innovation that accelerates financial
institutionsâ ability to spot new fraud patterns and prevent them from
causing extensive damage. Early response to this innovation has been
enthusiastic, with multiple projects already underway, including an
installation at a major, U.S.-based credit card issuer. Besides
incorporating adaptive analytics technology, FICO Falcon 6.0
expands FICOâs patented fraud detection and profiling techniques by
introducing global intelligent profiles to monitor high-risk ATMs,
merchants, risky geographic regions and other relevant entities. Falcon
6.0 also includes new detection and case management capabilities
relevant to retail banking lines of business such as demand
deposit/current accounts. Extensive testing with client data has shown
these innovations yield up to 44 percent improvement in detection model
performance, translating to increased fraud detection with fewer
Fair Isaac officially announced the release of its newest “FICO” scores
targeted specifically to the automobile lending and bankcard industries.
Credit reporting agency TransUnion is making the scores available to
lenders and issuers under the names “FICO Risk Score,” “Classic Auto 08”
and “FICO Risk Score” and “Classic Bankcard 08.” The new “FICO” scoring
model for bankcards is designed to give card issuers greater predictive
capabilities in their origination and account management decisions.
Product validation testing found that the new scores could potentially
increase issuersâ delinquency prediction rates by 6% to 12% compared to
the previous “FICO” bankcard score. In addition, the new score includes
refinements to address non-prime consumers and those with thin credit
Predictive analytic technology provider Fair Isaac is set to release the
latest version of “Falcon Fraud Manager 6.0”. “Falcon 6.0” is the first
fraud management solution to offer adaptive
analytics, which provide dynamic, real-time self-calibration of fraud
detection models, enabling institutions to identify and respond to new
threats with unprecedented speed. It also expands Fair Isaacâs patented
fraud detection and profiling techniques by introducing global
intelligent profiles targeting high-risk ATMs, merchants, risky
geographic regions and other criteria. For the first time
Falcon will include detection and case management capabilities relevant
to retail banking lines of business such as demand deposit/current accounts.
Fair Isaac reports that more than one million consumers now have access through their banks and credit unions to a free FICO score every month on their online statement. Also the Company has compiled practical guidelines to help consumers
manage their FICO scores in a volatile economy. They include making payments on time, keep credit card balances low,
open new credit cards or loans only when necessary, get free annual credit reports from each national credit
reporting agency through www.AnnualCreditReport.com, know the current FICO score,
ask banks about getting your FICO score free every month and
contact lenders to arrange for a payment plan that is manageable should there be financial hardships.
Fair Isaac has released the first available product of the Fair Isaac “Decision Management Suite.” “Debt Manager 7” enables resource-constrained card issuers and banks to manage a greater number of delinquent customers without the need for additional collections staff. The solution incorporates Fair Isaac “Collection Scores,” allowing collectors to prioritize delinquent customers based on risk, so collection time and resources can be allocated toward the customers that are most likely to respond. It also empowers representatives to arrange workout plans with delinquent customers in real time, on the first telephone conversation. Fair Isaac says creditors can generally expect a 15% to 20% improvement in collection strategy effectiveness compared to a subjective segmentation of accounts.
Fair Isaac confirms it is releasing the “Falcon Fraud Manager 6.0”
scoring server to select customers. The productâs general availability
is spring 2009. The “Falcon 6.0” scoring server is the first to offer
adaptive analytics, which provide dynamic, real-time self-calibration of
fraud detection models, enabling institutions to identify and respond to
these new threats with unprecedented speed.
It expands Fair Isaacâs patented fraud detection and profiling
techniques to create intelligent profiles targeting high-risk ATMs,
merchants, risky geographical regions and other criteria. Extensive
testing with clients showed up to 44% improvement in detection model
performance, translating to increased fraud detection with fewer false
positives. Fair Issac notes that data from Fair Isaac customers,
combined with independent research, shows a measurable increase in
certain types of fraud, notably cross-border and concentrated “flash
fraud” attacks, as well as emerging patterns of fraud in
card-not-present (online or telephone) and debit card transactions.
Minneapolis-based Fair Isaac posted third quarter revenues of $178.2 million, compared to $198.7 million in the prior year period.
Income for the quarter was $23.8 million, compared to $32.5 million for 3Q/07. Scoring Solutions revenues dipped 19% to $37.3 million due to a decrease in revenues from risk scoring services at the credit reporting agencies and from its “PreScore Service.” Strategy Machine Solutions revenues decreased 4% to $94.5 million due to declines associated with revenues derived from fraud and collections and recovery products.
Professional Services slipped 9% to $33.2 million due to a decline associated with Analytic consulting services. Analytic Software Tools revenues dropped 25% to $13.2 million, due to a decrease in revenues generated from sales of the “Blaze Advisor” product. Due to the uncertain economic environment and limited visibility into clients’ spending intentions, Fair Isaac is not providing guidance at this time.
For complete details on Fair Issac’s third quarter performance visit CardData ([www.carddata.com](http://www.carddata.com)).
Fair Isaac’s “Blaze Advisor” business rules management system is now available for a free 90-day trial download. Developers worldwide can now download the full current shipping version
of the software, install it and test it in their own environments. “Blaze Advisor” is a key component of the Fair Isaac Decision
Management suite, providing enterprises with a highly scalable,
end-to-end rules management solution to support a holistic approach to
decision making. The recipient of multiple industry awards, Blaze
Advisor has been recognized in the past year by analyst firms IDC and
Yphise, industry group ACORD/LOMA, and trade journal InfoWorld
Fair Isaac has launched its “Fraud Alert Network Forum” to facilitate collaboration among financial institutions against fraud. The forum allows financial professionals to share tips, techniques and experiences to counter against increasingly sophisticated fraud schemes, counterfeit ATM/credit cards and phishing scams through collaboration in a secure environment. Ideally, members will discuss specific criminal
attacks and how to manage similar incidents on the “Fraud Alert Network Forum”, to which membership is free for banking, credit union and law enforcement professionals. The new forum was previously known as the “CardAlert Fraud Forum,” originally launched in 2002.
With over 50 million U.S. consumers authorized users on another’s credit card, Fair Isaac has released methodology for restoring authorized user credit accounts to the calculation of “FICO 08” credit scores while reducing potential impact to the score from tampering. Using its own patent-pending technology, “FICO” has introduced the methodology to help protect scores from credit repair and help lenders meet legal requirement of the Equal Credit Opportunity Act. Fair Isaacâs Decision Management solutions combine trusted advice, world-class analytics and innovative applications to give organizations in 80 countries the power to automate, improve and connect decisions across their business, namely with its FICO score introduced in 1989.