LeBow College of Business from Drexel University and CIO.com named the FICO analysis software firm the winner of the Analytics 50 Awards for the second year in a row. The awards program honors organizations using analytics to solve business challenges. FICO received the award for FICO® Score XD which exploits groundbreaking analytical technologies and alternative data to help expand credit access in a safe and responsible manner.
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Led by Radha Chandra, Senior Scientist, FICO Scores Division, FICO's Analytical Development Team posed the following question: Can alternative data expand access to credit? After extensive research and validation, FICO launched FICO Score XD . Thanks to the development of FICO® Score XD FICO offers a potential for access to credit to the majority of the 50+ million Americans identified as "unavailable".
In addition to traditional credit data, FICO® Score XD consumes other data on telecommunications, cable and other payment history, as well as public and private data. property data. A specific design goal of FICO Score XD was to reflect the standards of the traditional FICO score – same 300-850 score range, similar relationship between a given score and the probability of repayment, even logical logic and the treatment.
FICO® Score XD uses positive and negative data from National Consumer Telecom and Utilities Exchange, Inc. (NCTUE), including new connection requests, payment history, the current status and account history and properties LexisNexisRisk records, frequency of residential moves, as well as bankruptcies, evictions and liens. All data sources comply with the Fair Credit Reporting Act (FCRA), the federal law that regulates the use of data by consumer information agencies.
While FICO scores based on traditional credit data remain the cornerstone of FICO activity, this initiative is helping banks and other lenders expand their addressable market by leveraging model-based scores using alternative data. The results demonstrate that consumers with a high score FICO® Score XD who obtain credit, retain a traditional high FICO score in the future – 49% scored 700 only 24 months later.
"The pioneering analyzes of FICO are a key element of our commitment to financial inclusion and provide lenders with a reliable and broad risk score that allows for an accurate assessment of the creditworthiness of consumers" said Ethan Dornhelm. President, Scores and Analytics, FICO. "It's an honor that FICO – and Radha Chandra from our team – have been recognized by Drexel University for our work in helping millions of people access credit."
FICO Score XD Research and Solutions also paved the way for similar initiatives in Mexico, Russia, Turkey and now India. The last solution – FICO Score X Data for India – was recently announced at Money 20/20.
The Analytics 50 is the fruit of a collaboration between the LeBow College of Business of Drexel University and CIO.com to reward companies that use analytical tools to solve business problems. The winners were selected by a panel of researchers and practitioners based on the complexity of the business challenges they faced, the analytical solutions implemented and the commercial impact of the solutions on the organization.