FICO also discovered a number of public record data
sources which were not present today in the credit bureau
files and that met FICO’s rigorous six point test. Public records data sources from LexisNexis Risk Solutions include
such types of data as length in residence, property ownership, frequency of address changes and how long it has
been since a consumer has been evicted.
FICO’S FINANCIAL INCLUSION
INITIATIVE OUTSIDE THE U.S.
FICO’s efforts to expand the scorable population
of creditworthy individuals are not limited to the United
States. In 2016, FICO announced the FICO Financial Inclu-
sion Initiative, a global effort to increase access to afford-
able credit for consumers with limited or no credit history.
Through this initiative, FICO is leveraging alternative data
outside the U.S. that includes a broader set of data sources
than in the U.S. – such as psychometric surveys, social
network, retail purchase and mobile phone information
to identify creditworthy consumers among the 3 billion
consumers globally that are unbanked or underbanked.
These projects test an approach to obtain alternative data
through consumer consent, which can allow for a broad ar-
ray of alternative data sources to be considered for a lend-
ing decision at the discretion and control of the consumer.
EXPANDING ACCESS TO CREDIT ISN’T
ABOUT LOWERING STANDARDS
By incorporating alternative data, lenders can effectively
identify good risks and safely expand access to credit in a
controlled, responsible and predictive way while ensuring
a quality score and quick access for consumers. The goal
is not to just generate more credit scores, but to ensure
those scores enable lenders to safely and responsibly
extend credit to a broader group of people. Leveraging
alternative data is a critical tool to generate meaningful,
predictive scores that reveal many creditworthy individuals
who would otherwise still be left out of mainstream credit.
In doing so, we can ensure the integrity of our scoring standards as well as empower lenders with the credit scoring
tools necessary for expansion of credit to a broader and
more diverse group than ever before.
Joanne Gaskin is the Senior Director, Scores and Analytics at
FICO. She oversees the FICO Scores regulatory practice and is
responsible for the strategic direction of FICO’s analytic solu-
tions and partnerships serving the mortgage industry.
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