FICO Launches Lenders Leading Inclusion Program to Expand Credit Access for Underserved Communities

Rhea-AI Summary

FICO has launched the Lenders Leading Inclusion Program to help Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) expand credit access for underserved communities. The program provides access to FICO® Score XD and UltraFICO® Score, which can reach over 50% of the U.S. credit-eligible population.

The initiative addresses the needs of nearly 53 million U.S. consumers with or no credit bureau data, including 25 million 'credit invisible' individuals. Participating institutions will receive alternative data scoring tools, program adoption resources, and inclusion-led lending strategy consulting. FICO Score XD utilizes phone and utility payment history, while UltraFICO Score considers consumer banking data to evaluate creditworthiness.

Positive

• Introduction of alternative credit scoring methods to expand market reach
• Potential to access over 50% of U.S. credit-eligible population
• Partnership with MDIs and CDFIs to expand business in underserved markets

Negative

• None.

Insights

Financial Inclusion Expert

This initiative represents a significant strategic move in expanding financial access, particularly targeting the 53 million U.S. consumers with or no credit history. The integration of alternative data sources through FICO® Score XD and UltraFICO® Score could potentially transform lending practices for underserved communities. The program's focus on empowering CDFIs and MDIs with advanced scoring tools addresses a critical gap in the financial system.

The partnership with LexisNexis® Risk Solutions adds substantial credibility and technological depth to the alternative data scoring system. By incorporating non-traditional data points like utility payments and banking behavior, this program could significantly reduce the number of "credit invisible" consumers while maintaining responsible lending practices. This approach aligns with broader industry trends toward more inclusive financial services without compromising risk management.

Market Research Analyst

From a market perspective, this initiative positions FICO strategically in the growing financial inclusion sector. By targeting the untapped market of 25 million credit invisible consumers, FICO is not only expanding its potential revenue streams but also strengthening its relationships with community financial institutions. The program could lead to increased adoption of FICO's scoring products and consulting services among CDFIs and MDIs.

The timing aligns with regulatory focus on financial inclusion and fair lending practices. This move could enhance FICO's competitive position against emerging alternative credit scoring providers while reinforcing its market leadership in credit risk assessment. The partnership with established institutions like LexisNexis® Risk Solutions and the National Bankers Association adds significant distribution channels and credibility to the initiative.

FICO Partners with Minority Depository Institutions and Community Development Financial Institutions to provide the tools and resources needed to help more borrowers unlock credit opportunities

ATLANTA--(BUSINESS WIRE)-- HOPE Global Forum - Global analytics software leader FICO (NYSE: FICO) today announced the launch of its Lenders Leading Inclusion™ Program to empower Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) to responsibly expand access to credit for underserved communities. By offering access to cutting-edge alternative data scores and financial inclusion strategies, FICO aims to responsibly expand credit access to more people and help consumers achieve financial opportunities.

“We created this program to support MDIs and CDFIs with the tools and resources they need to broaden their lending reach to more credit-ready applicants, including those with little or no credit history. The Lenders Leading Inclusion Program underscores FICO’s commitment to helping lenders responsibly expand credit access and opportunities to more people,” said Julie May, vice president and general manager of Scores at FICO.

Nearly 53 million U.S. consumers have scant credit bureau data or no credit bureau data at all, and 25 million of these are considered “credit invisible” with no credit bureau record. Research has shown that mission-driven financial institutions, like CDFIs & MDIs, that serve minority and other underserved populations often experience challenges in resources, including lack of access, capacity and technical support to adopt new technologies that can expand lending opportunities to more people. FICO is launching the Lenders Leading Inclusion Program to make critical resources available as part of FICO’s Global Financial Inclusion Initiative to enhance lenders’ decision making and forward financial inclusion efforts around the world.

CDFIs and MDIs participating in the Lenders Leading Inclusion Program will be able to access FICO’s technology, expertise and information to expand their financial inclusion initiatives. Participants will receive:

• Access to FICO’s leading scores for financial inclusion, FICO® Score XD and UltraFICO® Score, which together, can provide access to more than 50% of the U.S. credit-eligible population.
  • FICO Score XD uses alternative data — including phone and utility provider payment history, public records, and asset insights — to help lenders foster inclusion by safely extending credit to more borrowers through a broader lens.
  • UltraFICO Score helps consumers improve access to credit by tapping into consumer-contributed data, such as checking, savings and money market account data, to reflect responsible financial management activity not available in a traditional credit file.
• Program adoption resources and tools for understanding FICO® Scores based on alternative data.
• Inclusion-led lending strategy design consulting by industry experts who have helped lenders achieve greater inclusion through analytics.

“As a pioneer in leveraging alternative data to advance financial inclusion, LexisNexis^® Risk Solutions is proud to align with FICO to support this program. We understand the importance of expanding access to credit for consumers and the financial institutions providing it. Alternative data is a critical driver of financial inclusion and being able to get access to a product like FICO Score XD can enable lenders to approve more applicants for financial products and provide opportunities that had previously been out of reach,” said Kevin King, vice president of Credit Strategy at LexisNexis Risk Solutions, a data, technology and analytics company.

“The Lenders Leading Inclusion Program is going to be invaluable for our MDI members,” said Nicole Elam, president and CEO at National Bankers Association, a leading MDI association. “With this initiative, our members will have access to the technology and expertise to help create more financial opportunities for their communities. It aligns with our mission to create broader opportunities to support MDIs.”

For more information and to sign up to participate, please visit: https://www.fico.com/en/fico-score-info

About FICO

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, insurance, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 80 countries do everything from protecting 4 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and has been made available in over 40 other countries, improving risk management, credit access and transparency.

Learn more at https://www.fico.com/en.

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For FICO news and media resources, visit https://www.fico.com/en/newsroom.

FICO and UltraFICO are registered trademarks of Fair Isaac Corporation in the U.S. and other countries.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241210214011/en/

Julie Huang

press@fico.com

Source: FICO

FAQ

What is FICO's Lenders Leading Inclusion Program and when was it launched?

FICO's Lenders Leading Inclusion Program, launched in 2023, is an initiative to help CDFIs and MDIs expand credit access for underserved communities by providing alternative data scoring tools and lending strategy consulting.

How many U.S. consumers can benefit from FICO's new credit scoring tools?

The program can potentially benefit 53 million U.S. consumers with credit bureau data, including 25 million 'credit invisible' individuals with no credit bureau record.

What alternative data does FICO Score XD use for credit evaluation?

FICO Score XD uses alternative data including phone and utility provider payment history, public records, and asset insights to evaluate creditworthiness.

What banking data does the UltraFICO Score consider for credit evaluation?

UltraFICO Score considers consumer-contributed data from checking, savings, and money market accounts to reflect responsible financial management activity.