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Why the FICO Score Reigns Supreme

Written by: Kristy Welsh

Last Updated: September 25, 2017

When we talk about credit scores, 9 times out of 10 we're talking about FICO Scores. The Fair Isaac Corporation isn't the only predictive scoring player on the field. True enough, but FICO did invent the game.

FICO Invented Credit Scoring

William Fair, an engineer, and Earl Isaac, a mathematician, founded the Fair Isaac Corporation (FICO) in 1956. Two years later, Fair and Isaac sent letters to 50 of America's largest lenders introducing the credit scoring model. Forty-nine of these letters went unanswered, but it only took one to jumpstart the FICO credit scoring empire.

In 1958, FICO built its first credit scoring system for American Investments. Slowly but surely, other lenders came around, including Montgomery Ward, Connecticut Bank and Trust, and Wells Fargo.

But it wasn't until 1981 that FICO introduced the first FICO credit bureau risk score. Eight years later, FICO partnered with one of these bureaus, Equifax, to create the first general-purpose FICO score. Two years later, these general-purpose FICO scores were available through all three major credit bureaus, Equifax, TransUnion, and Experian.

FICO Has 53 Credit Risk Scores

All of the possibilities for predictive scoring cannot be incorporated into one general credit risk score. In fact, there are so many behaviors to track, measure, and predict, that FICO has managed to create 53 different types of credit risk scores. This enables lenders to tailor their credit risk management to the specific nature of their industry and/or goals.

FICO Expanded Predictive Scoring Beyond Credit Risk

Since its founding, FICO has received more than 100 patents for its analytics and decision management products. In addition to scoring for credit risk, FICO has predictive scoring models for:

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FICO Has Virtually No Competition

In 2006, the credit bureaus came together to create their own version of a credit score, VantageScore. While FICO felt threatened enough to sue VantageScore in 2007, Fair Isaac could only prove a negligent loss of business to its new competitor. FICO dropped the lawsuit after the court ruled in VantageScore's favor, and the rest is history. Today, 90 percent of lending decisions are made using the FICO score.

Bottom line, your FICO score matters a lot, so do all you can to score well.

Your FICO score is determined by the listings on your reports with the three major credit bureaus. So if it's been more than a year, request your free copies at Then come back here to Credit Info Center for step-by-step instructions on how to analyze your reports and what to do about negative listings that are dragging your FICO score down.

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