Ten Facts About the History of FICO

Apr 28, 2011   //   by admin   //   Building Your Credit, Credit Restoration  //  368 Comments

A three digit number that tells the story of your past and holds the potential of your future? Nope, it’s not your weight or your cholesterol. And hopefully it’s not the score of your latest golf round, yikes! Of course, it’s a credit score—one of the very first things you want to know about a potential borrower. So you always know your customers’ credit scores, but do you know anything about where they came from?

 

While the exact method behind calculating these revealing little numbers remains a mystery, here are a few fun facts you may not have known about the history of one of the most powerful numbers in our lives.

Ten Facts You Didn’t Know About FICO:

1. FICO actually stands for the Fair Isaac Corporation, a company started in 1956 by an engineer and a mathematician.
2. It wasn’t until 1958 that FICO created its first credit scoring system for American Investments.
3. Later that year, FICO sent out 50 letters to America’s biggest lenders asking to explain their credit scoring system. They got one response.
4. One of the best investments founders Bill Fair and Earl Isaac ever made? The $400 each of them contributed to start the Fair Isaac Corporation.
5. Remember Montgomery Wards? In the early 1960’s FICO built their first credit scoring system.
6. In 1995, nearly 40 years after FICO began; Fannie Mae and Freddie Mac recommended the use of FICO scores to evaluate mortgage loans.
7. In 2010 FICO introduced their national FICO certification for mortgage lenders with AllRegs.
8. FICO also boasts that it has more than half of the world’s top 100 banks as their clients.
9. Even more impressive, nine of the top ten Fortune 500 companies are FICO clients.

And finally…

10. Just how prevalent are FICO scores in the mortgage industry? Today, FICO scores are used in 3 out of 4 US mortgage originations.

368 Comments

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