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Ask FICO Inventor, Fair Isaac, Your Burning Questions

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Nina, a PR person from Fleishman-Hillard on behalf of Fair Isaac, read our opinions about the subprime lending meltdown and offered up an opportunity to ask two executives from Fair Isaac Corporation some questions. Fair Isaac bills themselves out as “a leading technology and business analytics company who, among other areas of expertise, works closely with lenders to make accurate and profitable decisions on extending credit. They’re best known for their invention of the FICO score, the credit score most widely used by lenders.”

The two we have as resources are Mike Campbell, EVP and CCO, and Larry Rosenberger, VP and Analytics Research Fellow.

So, if you have a burning question you’d like to see someone at the Fair Isaac answer, please leave them in the comments. Here are a few ideas to get the wheels turning and please feel free to ask multiple questions:

  • How lenders are/should manage risk in an economic downturn
  • How lenders are revising policies and practices to adjust to the current economic climate
  • Where in the consumer credit cycle lenders are focusing now
  • Insights into whom is best positioned to withstand economic downturns such as this current one

Here are a couple I’ve thought of:

  • How has the behavior or criteria of lenders changed in the recent months?
  • What is the likely impact and your opinion of the new FICO score?
{ 8 comments, please add your thoughts now! }

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8 Responses to “Ask FICO Inventor, Fair Isaac, Your Burning Questions”

  1. Minimum Wage says:

    Okay, something has been bugging me for quite some time and this looks like a good place to ask.

    Six years ago, an uninsured extended illness and hospitalization with loss of income tanked my credit. All my active open accounts were closed and charged off., and I ended up with two “sticky” derogs that won’t even begin to age until resolved – and while I returned to work some time ago, I have been unable to resolve either on my minimum wage income.

    My scores have improved modestly due to aging of the soon-to-drop-off derogs, but they are still in the tank (roughly 500, 550, and 620 – go figure).

    I have been told that given the timeline, my subprime score is now driven more by my lack of positives than by my aging negatives. But without confidence of approval, I am reluctant to even apply for credit for fear of dinging my already-hurting score. My minimal income seems to be an obstacle to gaining confidence of approval; even my credit union considered my approval prospects unfavorable due to my low income.

    Is there any hope of restoring a mainstream credit record?

  2. Rook says:

    Why is revolving debt so heavily weighted in the FICO equation? It would seem that long term debts such as mortgage would be the most important factor in a credit score.

  3. Rook says:

    What is a favorable DTI ratio?

  4. moneymagnet says:

    To my knowledge, there is NO LAW governing credit scores, FICO. I do not want a credit card and have paid off my debts years ago. This impairs a person when they cannot gain employment due to this system. It has prevented me from working at corporations, paying my electric bill, gas bill and putting food on the table. FICO is not fair and penalizes those that want to live financially free. I believe that there should be accountability to CITIZENS that have been denied.

  5. Orlando says:

    I would like to know why (or so I have been told when taking out a loan for purchase on the vehicle) auto loans work under a different scoring system than when borrowing for a home loan. And why is it that if I have a score of 780 or better and make a mistake (over 30 day late payment as an assumption), my score can be hit harder than if my score were 680? Why is not not the same for both?

  6. chip says:

    I feel the credit system is screwed up and unfair to the “average” consumer. If youre late one time it remains on your credit report for years. The consumer has no rights. The reporting agency has the upper hand on our future.

    If I had the time and resources, I’d quit my job and become an activist for “fair and balanced” credit reporting.

    Are we not allowed 1 mistake without a penalty?

  7. leroy says:

    I have read conflicting information about how a closed credit card with a balance is calculated in your utilization. Is the value of current balance also used as the credit available (effectively 100% for this card) or do they use your previous card limit which would give you a lower utilization?

  8. Elizabeth says:

    I would like to know if FICO has investments and caters to Sharia Investment.
    Does FICO entertain business practices with Sharia credit card companies and financial institutions?


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