An Introduction to Fair, Issac & Company

The Company

Fair Isaac Corporation is a provider of credit scoring, decision management, fraud detection and credit risk score services. Fair Isaac was founded in 1956 on the premise that data, used intelligently, can improve business decisions.

Fair Isaac offers automatic decision management systems by creating analytic solutions. These solutions include analytics such as predictive models and strategy optimization that guide decision strategies; data management and data analysis services that bring complete customer information to every decision; and decision management systems that implement decision strategies in a real-time environment for faster, more consistent and more accurate decisions. Fair Isaac also provides tools and services that help businesses develop and deploy their own systems for enterprise decision management.

The History of the FICO Score

Fair Isaac developed this scoring model using millions of actual consumer credit data files to develop a complex and secret mathematical algorithm. And since FICO is developer and owner of the model, its primary elements of the FICO credit score system is kept secret.

Credit scoring is a method of determining the likelihood that credit users will pay their bills on time. Fair, Isaac started developing credit scoring models in the late 1950s and, since then, credit scoring has been used by lenders. It was adopted widely by mortage lenders in late 1990s after Fnannie Mae and Freddie Mac endorsed it.

Three credit bureaus (Equifax, Experian and TransUnion) use FICO software to calculate credit scores and sell them to lenders. Lenders buy your FICO score from three national credit reporting agencies. Each credit agency's credit score may be different because they collect their information from different creditors and update their records at different times.

How the FICO Credit Score System Works

Again, while the actual methodologies of the FICO credit score system are secret, in general terms, the major credit reporting agencies consider a number of factors in determining a consumer’s FICO credit score. These factors that are considered in computing a FICO credit score are: payment history, current unpaid debt, how long you have had credit, number of credit inquiries, and types of credit you’ve had in the past.

Using this data, the credit reporting agency will assign a FICO credit score to a consumer somewhere in the range of 300 to 850.

Contact Information

901 Marquette Avenue
Suite 3200
Minneapolis, MN 55402-3232
(800) 213-5542