FICO Introduces More Predictive Scores For Auto Loans

MINNEAPOLIS — FICO, a provider of analytics and decision management technology, released its newest FICO scores created specifically for 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, Classic Bankcard 08.

The new products are industry-focused versions of the FICO 08 score, launched earlier this year. They improve upon the predictive performance of FICO industry scores now in use while providing auto lenders and card issuers with refined risk performance classification, enhanced segmentation capabilities, and protection against authorized user account “piggybacking,” while supporting compliance with federal fair lending and credit reporting regulations.

The new FICO 08 score for auto loans is expected to provide a significant increase in predictive power compared to previous versions of the FICO scoring model. Using the new score, auto lenders may be able to identify as many as 5 percent to 15 percent more potential delinquencies among consumers as they could with the previous FICO auto score. Use of the scores can help lenders make better informed decisions to as they seek to increase account bookings while reducing delinquencies and losses.

“Auto lenders and bankcard issuers today face a similar challenge – the need to grow their business with good customers while cutting their risks and losses,” said Lisa Nelson, vice president of Global Scoring at FICO. “That is why we took the initiative to make the FICO 08 score more precise and predictive than ever before, and now we’ve further refined it to address the specific needs of these two industries. Clients who have been using our auto and bankcard scores can convert to the new scores with only minimal implementation changes.”

To further ease the transition, the new FICO auto and bankcard scores retain the same scoring range, score reason codes, minimum scoring criteria, and inquiry treatment as previous versions of the scores.