FICO Forms Licensing Agreement with MicroBilt

MINNEAPOLIS — FICO struck a licensing agreement with MicroBilt Corporation, giving the provider of risk management information and services rights to use FICO’s scoring model to calculate and sell FICO Expansion scores to lenders and businesses that grant credit.

Under the terms of the agreement, FICO will retain ownership of the FICO Expansion score model and its development, and the data sources underlying the FICO Expansion score will not change. MicroBilt will obtain the underlying data directly from the providers, enabling the firm to process applications that might benefit from the inclusion of non-traditional credit data. In addition, MicroBilt has direct links to the three major credit bureaus, which means clients can get both the traditional FICO score and the FICO Expansion score from a single source, without the need for multiple connections and complex workflows.

“Small and medium-size businesses have been hard hit by the recession. They need to be able to extend credit to thin and no-file consumers to build sales, move inventory and add jobs,” said Walt Wojciechowski, CEO of MicroBilt. “The FICO Expansion score evaluates the most comprehensive set of non-traditional credit data in the market, making it the most reliable indicator of creditworthiness in the absence of traditional credit history. Our agreement with FICO will benefit our clients and their customers alike.”

“MicroBilt was our first reseller of the FICO Expansion Score, and its strong relationships with lenders are a major factor in broadening the score’s appeal in the market,” said Robert Duque-Ribeiro, vice present and general manager of Scoring for FICO. “We are extending this partnership because MicroBilt’s market focus will provide additional convenience and support to clients who want to extend credit to thin and no-file consumers.”

FICO, a provider of analytics and decision management technology, developed the FICO Expansion score to help lenders assess the credit risk of an estimated 50-70 million U.S. consumers who have either no traditional credit history or “thin” credit bureau files. This diverse population includes students, senior citizens and recent immigrants.

The scoring model bases the score on a variety of non-traditional credit data such as subscription memberships, deposit account activity and utility histories. The resulting scores have the same 300-850 score range as the traditional FICO score and can be used to complement the traditional score. As a result, businesses and financial institutions can grant credit confidently to responsible consumers who are capable of meeting their obligations but lack established credit histories.