FICO
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FICO (legal name: Fair Isaac Corporation), originally Fair, Isaac and Company, is an American data analytics company based in Bozeman, Montana, focused on credit scoring services. It was founded by Bill Fair and Earl Isaac in 1956.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Its FICO score, a measure of consumer credit risk,<ref name=nytimes>Template:Cite news</ref> has become a fixture of consumer lending in the United States.
In 2013, lenders purchased more than 10 billion FICO scores and about 30 million American consumers accessed their scores themselves.<ref name=nationalmortgagenews>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> The company reported a revenue of $1.29 billion for the fiscal year of 2020.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>
HistoryEdit
FICO was founded in 1956 as Fair, Isaac and Company by engineer William R. "Bill" Fair and mathematician Earl Judson Isaac.<ref name="businessweek">Template:Cite news</ref> The two met while working at the Stanford Research Institute in Menlo Park, California.<ref name="startribune">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Selling its first credit scoring system two years after the company's creation,<ref name=hist>About Us | FICO — FICO official Web site</ref> FICO pitched its system to fifty American lenders.<ref name="marketplace">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>
FICO went public in July 1987<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> and is traded on the New York Stock Exchange.<ref name=businessweek /> The company debuted its first general-purpose FICO score in 1989.<ref name=nytimes /> FICO scores are based on credit reports and "base" FICO scores range from 300 to 850,<ref name=nytimes /> while industry-specific scores range from 250 to 900.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>
Lenders use the scores to gauge a potential borrower's creditworthiness.<ref name="nytimes2">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>
Fannie Mae and Freddie Mac first began using FICO scores to help determine which American consumers qualified for mortgages bought and sold by the companies in 1995.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>
Name changesEdit
Originally called Fair, Isaac and Company (hence the abbreviation FICO), this name was changed to Fair Isaac Corporation in 2003.<ref name=hist/>
Headquarters movesEdit
Originally based in San Rafael, California, FICO moved its headquarters to Minneapolis, Minnesota, in 2004, a few years after Minnesota resident Thomas Grudnowski took over as CEO.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> In 2013, it moved its headquarters to San Jose, California, a year after CEO William Lansing joined.<ref name=mercurynews>Template:Cite news</ref> In 2016 it opened an office in Bozeman, Montana which later became its headquarters.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>
AcquisitionsEdit
- DynaMark 1992<ref>{{#invoke:citation/CS1|citation
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- Risk Management Technologies 1997<ref>{{#invoke:citation/CS1|citation
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- Prevision 1997<ref>{{#invoke:citation/CS1|citation
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- Nykamp Consulting Group 2001<ref>{{#invoke:citation/CS1|citation
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- HNC Software 2002<ref>Template:Cite news</ref>
- NAREX 2003<ref>{{#invoke:citation/CS1|citation
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- Diversified Healthcare Services 2003<ref>{{#invoke:citation/CS1|citation
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- Seurat (2003)<ref>{{#invoke:citation/CS1|citation
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- London Bridge Software 2004<ref>{{#invoke:citation/CS1|citation
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- Braun Consulting 2004<ref>{{#invoke:citation/CS1|citation
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- RulesPower 2005<ref>{{#invoke:citation/CS1|citation
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- Dash Optimization 2008<ref>{{#invoke:citation/CS1|citation
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- Entiera 2012<ref>{{#invoke:citation/CS1|citation
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- Adeptra 2012<ref>{{#invoke:citation/CS1|citation
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- CR Software 2012<ref>{{#invoke:citation/CS1|citation
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- Infoglide 2013<ref>{{#invoke:citation/CS1|citation
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- InfoCentricity 2014<ref>{{#invoke:citation/CS1|citation
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- Karmasphere 2014<ref>{{#invoke:citation/CS1|citation
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- TONBELLER AG 2015<ref>{{#invoke:citation/CS1|citation
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- QuadMetrics 2016<ref>{{#invoke:citation/CS1|citation
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- GoOn 2018<ref>{{#invoke:citation/CS1|citation
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- EZMCOM 2019<ref>{{#invoke:citation/CS1|citation
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Antitrust issuesEdit
In March 2020, the US Department of Justice (DOJ) opened an antitrust investigation into FICO, which was reported to be closed in December 2020.<ref>Template:Cite news</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> In March 2024, US Senator Josh Hawley sent a letter to the DOJ's Antitrust Division urging them to open an investigation into FICO for anti-competitive practices, stating that the company "appears to be using its monopolistic power over the credit scoring market to increase costs for mortgage lenders."<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>
Between 2020 and 2023, at least 10 antitrust class action lawsuits were filed against FICO involving "business to business" purchases of FICO scores, with the plaintiffs alleging that FICO maintains monopoly power through anticompetitive agreements and charges artificially inflated prices for FICO scores.<ref name="Scarcella-2023">Template:Cite news</ref><ref name="Competition Policy International-2023">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> In September 2023 US District Judge Edmond Chang ruled that the plaintiffs, which include credit unions, banks, mortgage lenders, real estate brokerages, auto dealers, and other companies, had presented enough evidence that FICO had violated antitrust law to allow the lawsuits to proceed.<ref name="Scarcella-2023" /><ref name="Competition Policy International-2023" />
OperationsEdit
FICO is headquartered in Bozeman, Montana and it has additional U.S. locations in San Jose, California, Roseville, Minnesota, San Diego, California, San Rafael, California, Fairfax, Virginia, and Austin, Texas.<ref name="locations">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>
The company has international locations in Australia, Brazil, Canada, China, Germany, India, Italy, Japan, South Korea, Lithuania, Malaysia, the Philippines, Poland, Russia, Singapore, South Africa, Spain, Taiwan, Thailand, Turkey, and the United Kingdom.<ref name=locations/>
FICO scoreEdit
{{#invoke:Labelled list hatnote|labelledList|Main article|Main articles|Main page|Main pages}} Template:See also A measure of credit risk, FICO scores are available through all of the major consumer reporting agencies in the United States: Equifax, Experian, and TransUnion.<ref name=ccrs>Credit Reporting Agencies — FICO official Web site</ref> FICO scores are also offered in other markets, including Mexico and Canada,<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> as well as through the fourth U.S. credit reporting bureau, PRBC.<ref>Fair Isaac and PRBC Team Up to Enhance Credit Risk Tools Used by Mortgage Industry — FICO official Web site</ref>