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.
