New risk score from Equifax- FICO alliance identifies which UK consumers can handle more credit
Card issuers 'could safely extend credit to 15% more consumers' using solution that includes FICOÂ® Credit Capacity IndexTM and Equifax Risk Navigator4
Capitalising on FICO’s patented analytic technology and Equifax’s rich credit data and bureau characteristics on the UK population, the new solution from the Equifax-FICO alliance gives lenders a more effective way to assess a consumer’s ability to manage additional credit. Issuers will be able to take a more forward-looking view of credit risk, enabling them to grow their customer portfolios without extending credit increases to consumers who will be unable to manage the additional debt.
Initial analysis shows that a sizeable number of UK borrowers could handle additional credit.
“We have tested the FICO Credit Capacity Index based on Equifax data, and we are impressed by the results,” said Rick Odd, head of risk for Current Accounts and Credit Cards at HSBC. “This is precisely the kind of innovation the UK banking industry needs to pursue profitable growth and continue to further enhance their commitment to responsible lending. We are investigating how we could utilise this new metric in our lending strategies.”
A series of webinars is planned for November 2012 to provide more information on how the new score could support issuers’ risk strategies. Details of the webinars, as well as information on the FICO Credit Capacity Index and the alliance’s other joint solutions, are available at www.efxfico.com.
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