WSJ - FICO Sees Its Hold on Credit Slipping (paywall)

[racer7949]

 

 

FICO Sees Its Hold on Credit Slipping {print edition headline}

 

Highlights:

 

”Big lenders are moving away from FICO... Capital One Financial Corp. and Synchrony Financial don’t use its scores for most consumer-lending decisions. They are becoming a smaller factor in some underwriting decisions atJPMorgan Chase & Co. and Bank of America Corp.”

 

“Regulators are concerned that FICO leaves too many Americans behind, limiting them to payday loans and other costly forms of credit.”

 

“Big banks are increasingly approving applicants with low FICO scores or rejecting those with high scores if alternative metrics point in a different direction, lending executives said.”

 

 

Edited July 26, 2021 by racer7949

[centex]

In other words and loosely translated...

 

Subprime issuers use subprime risk tools to approve subprime customers.

[cv91915]

On 7/26/2021 at 6:07 AM, racer7949 said:

Regulators are concerned that FICO leaves too many Americans behind

 

Regulators are concerned that credit is only being extended to people who are most likely to repay it.

[BigSpenderBigSaver]

I read this yesterday and wondered what you all thought about it. Are consumers really seeing less FICO use and more VantageScore use? I wonder if a lenders’ internal metrics are more bewildering than how we work within the current framework, if we will be able to keep up with how it all works.


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[centex]

4 hours ago, BigSpenderBigSaver said:

I read this yesterday and wondered what you all thought about it. Are consumers really seeing less FICO use and more VantageScore use? I wonder if a lenders’ internal metrics are more bewildering than how we work within the current framework, if we will be able to keep up with how it all works.

 

I'm not sure ANY major lender has been identified as using Vantage sKores. 

 

Some have some proprietary internal algorithms, which is part of why American Express was long noted for approval of some with lower scores (low 600's) while declining some high-scoring applicants. 

 

Almost every lender who posts a Vantage sKore makes note of the fact that it is NOT the score they use for decisioning!

[cv91915]

4 hours ago, BigSpenderBigSaver said:

I read this yesterday and wondered what you all thought about it. Are consumers really seeing less FICO use and more VantageScore use? I wonder if a lenders’ internal metrics are more bewildering than how we work within the current framework, if we will be able to keep up with how it all works.

 

Industries don't move very fast, and change is in constant motion.

 

But a headline which says that doesn't get you to read the article below it.    

 

Note that the push related to the mortgage industry accepting alternative scores has nothing to do with ensuring a resilient, robust housing finance market.