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Fair Issac Co.?

What is a FICO score and where did it come from?  The scoring software was developed by the Fair Issac Co.  which specializes in data accumulation and interpretation.  A credit score is a numerical expression based on a statistical analysis of a person’s credit files, to represent the creditworthiness  of that person. A credit score is primarily based on credit report information typically sourced from credit bureaus.  There are three of these bureaus – Equifax, Experian, and TransUnion.

Lenders, such as banks  and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. Lenders also use credit scores to determine which customers are likely to bring in the most revenue.

Credit scoring is not limited to banks. Other organizations, such as mobile phone companies, insurance companies, landlords, and government departments employ the same techniques.

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