SAN JOSE, Calif., Feb. 14, 2020 /PRNewswire/ -- Leading
analytics software firm, FICO, partnered with the Department of
Housing and Urban Development (HUD) and the Policy and Economic
Research Council (PERC) on a new study examining how reporting
rental payments to consumer reporting agencies (CRAs) impact
consumers with thin-to-no credit profiles or low credit scores.
The first-of-its-kind study from HUD and PERC, "Impacts of
Credit Report Public Housing Rental Data," analyzed the
ever-present issue of credit invisibility, which can limit housing
options for approximately 54 million people in the U.S.
The study assessed credit scores of more than 9,000 HUD-assisted
households across Cook County, IL,
Louisville, KY, and Seattle, WA, using credit risk models,
including FICO® Score 9. One of the key findings reinforced the
benefits of reporting rental payment data to consumer credit
agencies, by showing that there was a significant increase in the
number of HUD-assisted tenants with credit scores above 620.
Additionally, the rate of 'unscorable' tenants also fell
substantially.
"Financial inclusion remains a top priority for FICO, so working
with HUD and PERC on this study was a natural fit," said
Joanne Gaskin, vice president of
Scores and Analytics at FICO. "When we calculated FICO Score 9 for
the study, we found that a majority of households who were
previously unscorable received a credit score after the addition of
rental payment data. FICO is eager to continue to work with HUD to
encourage broader inclusion of rental data at the CRAs to support
consumers' access to affordable credit."
In 2015, FICO introduced FICO Score 9, which factors in rental
payment history into the score when it's reported to the CRAs. The
launch of FICO Score 9 coincided with the first evidence of
sufficient positive and negative rental data at the consumer credit
agencies, a necessary condition for adding this data into the FICO
Score algorithm. FICO Score 9 is the latest version of FICO's
credit scoring model currently available at the three main
CRAs.
About FICO
FICO (NYSE: FICO) powers decisions that
help people and businesses around the world prosper. Founded in
1956 and based in Silicon Valley, the company is a pioneer in the
use of predictive analytics and data science to improve operational
decisions. FICO holds more than 195 US and foreign patents on
technologies that increase profitability, customer satisfaction and
growth for businesses in financial services, manufacturing,
telecommunications, health care, retail and many other industries.
Using FICO solutions, businesses in more than 100 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 www.fico.com.
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SOURCE FICO