PR - Fair Isaac Introduces Tools for Lenders to Improve Forward-Looking Credit Risk

Fair Isaac Corporation (NYSE: FIC), a provider of analytics and decision management technology, announced a new forward-looking decision tool kit for lenders. The Fair Isaac Risk Management Suite, available in 2Q08, provides deeper insight into the future debt sensitivity and default risk of individuals, as well as more precise understanding of default risk across entire loan portfolios.

The suite includes the latest FICO(R) 08 Score plus a new Credit Capacity Index score, Portfolio Stress Testing analytics, and educational modules known as Fair Isaac Insights.

"Our clients are experiencing unprecedented pressure to identify, understand and manage risk amid today’s fast-moving, uncertain economic conditions," said Dr. Mark Greene, CEO of Fair Isaac. "As the industry leader, we are responding with a far-reaching set of innovative resources that extend lenders’ ability to predict and manage credit risk effectively."

The Fair Isaac Risk Management Suite consists of:

FICO 08 Score – As announced previously, Fair Isaac is adding  valuable innovations to its traditional FICO credit bureau risk  score that will significantly enhance its predictive power across the  entire spectrum of credit risk, with the largest increases coming in  three important consumer segments:

• Originations and new accounts;
• Borrowers who pose higher risk, often referred to as subprime borrowers;
• Borrowers with thin or young credit bureau files. Lenders will be able to use FICO 08 Scores with minimal changes to their current operating systems.

Fair Isaac Credit Capacity Index – This custom solution will  offer lenders significantly deeper insight about consumers in a given FICO score range by illustrating the degree to which consumers at  that risk level are able to handle future, incremental debt. Used in  tandem with the FICO credit score, the Credit Capacity Index will  provide lenders with unprecedented control of credit risk. Lenders  are now preparing to test the Credit Capacity Index for use with  revolving consumer debt such as credit cards. Application of this  technology for use by mortgage lenders is also being explored for  predicting outcomes, such as which borrowers with adjustable rate  home loans will safely handle higher payments once their loan rates reset.

Fair Isaac Portfolio Stress Testing – This new portfolio-level  analytic offering will complement the FICO credit score by applying  macro-economic forecasts (such as GDP, unemployment rates, and  personal income) against a credit portfolio to help lenders simulate  aggregate changes on the default probability for that portfolio. With  greater insight into future portfolio performance, lenders can make  better credit decisions at the portfolio level, such as increasing or  decreasing available credit to customers in that portfolio.

Fair Isaac Insights – A programmatic approach to educating the  market on sound lending practices, Fair Isaac Insights include  informative white papers on such topics as the role of transaction  analytics, what comes after Basel II, and other areas germane to the  credit industry, along with modules to help consumers understand the  meaning of their credit scores and how to improve them.

"In challenging times, it falls to the leaders to stay the course and produce innovations that restore equilibrium and growth," said Mike Campbell, Chief Operating Officer for Fair Isaac. "As a leader in analytics and decision technology for 50 years, we take our responsibility seriously, and will continue to work closely with our clients and partners to develop the products they need to be successful."