FICO Introduces New Bankcard and Auto Credit Scores

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 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 issuers’ delinquency prediction rates by 6 percent to 12 percent compared to the previous FICO bankcard score. In addition, the new score includes refinements to address non-prime consumers and those with thin credit histories.

“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.