A Positive Sign: Bureau Evolution in Australia

You may have read earlier this week about how Brazil, one of the fastest growing economies, is poised for great change in how it tracks consumer credit behavior. Brazil is not alone. After almost a decade of deliberation, Australia, too, is finally following the footsteps of positive credit bureau countries....

Positive data sharing in Brazil is a positive move

One of the reasons that the FICO® Scores are so powerful a risk predictor in the U.S. is that the underlying credit bureau data includes a wealth of both positive and negative bureau data. Now one large credit market that previously had only negative credit bureau data — Brazil —...

Subjective Tinkering of Credit Scores is Bad Policy

Recently I made a case against a new IRS policy to withdraw tax liens from the credit bureau files of delinquent taxpayers who eventually pay their overdue bills. This subjective tinkering with empirically developed credit scoring only ends up hurting consumers, particularly those who legislators are trying to protect. It...

How Profitable Are Your Customers?

Customer profitability is a critical question, no matter if you are a bank in a slow-growth market (where it’s probably regulation and slashed operating budgets that are making your job harder) or a high-growth market (where you have been so focused on originating and acquiring customers, that you may have...

The Counter-Cyclical Imperative in China

You’ve read from my colleague, David Molyneaux, on how the long-awaited publication of capital guidelines from the Basel Committee on Banking Supervision should help the financial industry emerge from the financial crisis stronger and better capitalized. Here’s some perspective on how that’s playing out in Asia Pacific. Many banks in...

Q&A: Dodd-Frank Amendment Could Impact Fraud

In an interview with GovInfoSecurity.com, FICO blog author and fraud expert Mike Urban spoke about the Durbin Amendment and its impact on fraud. Here's an excerpt: The highly debated proposal from Sen. Dick Durbin, D-Ill., would amend the Dodd-Frank Wall Street Reform and Consumer Protection Act by significantly reducing interchange...

How Much of the 80% Do You Capture?

Up to 80% of the risk associated with the entire lifecycle of an account can be determined at the point of application. Are you capturing this much of the risk, and using it to improve your origination decisions? It’s a critical issue today, as lenders try to find profitable customers...

The UK’s Second Important Wedding Benefits Banks

As anyone following the economic situation in the UK knows, these are trying times for banks and consumers alike. The Bank of England just released another disappointing growth report, and revised its projection down to 2.7 percent in 2011, and 2.8 percent in 2012. Overall productivity has eroded due in...

Join FICO for a Live Interview on Credit Scoring on Monday, May 16

Next Monday, Bankrate.com’s Leslie McFadden will conduct a live interview about credit scores with FICO blog author Careen Foster, director of Scores product management. Specific topics of discussion will include the Credit CARD Act, risk-based pricing rules, the inclusion of alternate data in credit scores and building a credit score...

Credit Reports Are More Reliable Than They Get Credit For

A new report by PERC demonstrates the accuracy of U.S. credit reports. In the study, less than 1 percent of all credit reports examined by participants prompted a dispute that resulted in a credit score adjustment and an increase of a credit score of 25 points or greater. The fact...

Strategic default: More than an ethics debate

Strategic defaults and the changing consumer stigma around defaulting on a mortgage make for an interesting ethical debate, argued in media outlets ranging from the Chicago Tribune to The PBS NewsHour. But ethics aside, let's not lose sight that strategic defaults have negative consequences for consumers, servicers and investors. Consumers...

Stabilizing RWA Calculations

As an article in last week's Financial Times notes (Time to work out real odds in the weighting game, May 2), some European regulators are calling for a standard way to calculate risk-weighted assets (RWA) under Basel. RWAs and equity are used to determine a bank's capital strength. Banks and...

Video: What's the profile of a strategic defaulter?

More American homeowners are choosing not to pay their mortgage, a phenomenon known as strategic default. In this video, Andrew Jennings, FICO's chief analytics officer, shares FICO Labs findings about new analytics for predicting strategic default and the profile of a strategic defaulter. If you have difficulties with the embedded...

Preparing for new score disclosure regulations in July

On the heels of the Federal Reserve/FTC’s risk-based pricing rule that went into effect January 1, lenders must immediately turn their attention to the next set of regulations governing credit score disclosures. As part of the Dodd-Frank financial reform bill, Senator Mark Udall added a provision that requires credit scores...