FICO® Score 4 and FICO® Extended Score 4 can help lenders, insurers, and service providers in Mexico extend access to credit to an additional 8 million eligible consumers
MEXICO CITY–(BUSINESS WIRE)–$FICO–FICO (NYSE: FICO), a global analytics leader, today announced the release of FICO® Score 4 and FICO® Extended Score 4 in Mexico. The new score models are specifically designed to seamlessly incorporate the entirety of the credit file, making it ideal for Mexico’s large and dynamic population. In partnership with Círculo de Crédito, in Mexico, FICO has redeveloped the FICO® Score using sophisticated machine learning modeling techniques to mine trends in recent consumer data to help lenders in Mexico predict consumer credit risk. The product is available now.
The FICO® Score was first introduced in Mexico by Círculo de Crédito in 2014 and to date, Círculo de Crédito has sold more than 200 million FICO® Scores, including nearly 30 million FICO® Extended Scores, which are used by banks, fintech’s, finance companies, retailers, insurance companies and other credit grantors to make credit decisions, including for credit cards, auto loans, personal loans, and mortgages.
Círculo de Crédito’s aggressive regional expansion has contributed to FICO’s redevelopment of the FICO Score by leveraging data from leading challengers along with traditional financial institutions. This new version is an enhancement to the previous scores as the innovative analytic methodologies used by FICO aim to provide strong performance, better financial inclusion, an empirically derived score, and better customer segmentation capabilities.
More Inclusive and Predictive Risk Decisions
Delivering stronger predictive power, FICO® Score 4, based on Círculo de Crédito data, improves the assessment of a borrower’s likelihood to default by providing a numerical snapshot of a consumer’s credit risk. The Score analyzes the information available on the credit bureau, profile and produces a score in the range of 300-850 that is indicative of the future credit risk. This precise risk prediction applies to decisions across financial industries, customer segments, credit products, and lifecycle phases – from origination to collections. FICO® Extended Score 4 builds on the foundational credit bureau, data used in the FICO Score® 4, but incorporates expanded data sources unique to Círculo de Crédito, allowing for more consumers to be scoreable and expanding access to credit.
“In partnership with Círculo de Crédito, we are proudly bringing the dependability and industry-leading predictive power of the new FICO® Score 4 Suite to Mexico to expand access to credit in the region,” said Pablo Morales, Head of Latin America Global Partners & Alliances at FICO. “This is the culmination of continuous work with our partners to innovate using the latest, most robust data science, and sophisticated artificial intelligence and machine learning model development techniques. Our new models broaden financial inclusion by an additional 8 million scorable consumers in Mexico by leveraging new consumer credit information.”
Best Performing FICO® Score to Date
Building off continued research, new data samples, and FICO’s state of the art analytic capabilities and predictive technologies in machine learning, FICO® Score 4 provides as much as 8.5% predictive lift over previous versions of the FICO® Score, while FICO® Extended Score 4 provides up to 18% predictive lift over previous versions of the FICO® Score. These improvements in predictive power can help lenders safely avoid unexpected credit risk and better control default rates, while making more competitive credit offers to more consumers.
“Our goal at Círculo de Crédito is to generate credit conditions that promote financial well-being and trust between consumers and the industry, building better relations between credit providers and their beneficiaries, while helping companies and individuals better understand the information that will allow them to meet their economic and financial goals,” said Juan Manuel Ruiz Palmieri, CEO of Círculo de Crédito. “Through our partnership with FICO, FICO® Score 4 Suite has been developed and tested using our most recent data to address issues specific to regional lending practices, current consumer behaviors, and today’s credit environment to drive a responsible credit culture in the market.”
FICO® Score 4 and FICO® Extended Score 4 will help leaders identify opportunities for growth in their customer base, accurately manage organizational risk tolerance, increase profitability, and reduce losses, by bringing insights available from Círculo de Crédito to bear on credit risk decisions.
FICO® Scores are trusted by international lenders to balance credit risk, portfolio growth, and consumer experience since 1997. By leveraging alternative data sources, FICO® Scores can help expand credit access to consumers around the world. Research for one large Mexican lender modeled using FICO® Score 4 showed the potential to increase profit by up to 86% by reducing delinquency up to 13% while maintaining current acceptance rates.
About Círculo de Crédito
Círculo de Crédito provides strategic data, decision and digital solutions to empower any company to run profitable financial services in Mexico. With over 3,500 B2B customers, over 700 million Data points and information on over 75 million Mexicans; Círculo partners with banks, retailers, Fintechs, proptech telcos, government, financial and insurance companies to help them make the best decisions and benefit their customers through customer data, value-added products such as scores, and customized solutions in México.
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 120 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time. Learn more at http://www.fico.com.
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