FICO, Equifax launch repayment risk assessment solution

The FICO Risk and Affordability Decision Suite is designed for lenders who need to decide which customers can handle additional or existing credit. This regtech solution is based on thorough research into risk and affordability factors and their relationship to consumers’ payment patterns. While initially available for cards, the solution is designed to address credit and affordability risk across all credit portfolios.

The Risk and Affordability Decision Suite models include:

• A new consumer-level FICO Customer Management Score for risk assessment, developed using a combination of traditional methodologies and machine learning techniques

• A Balance Change Sensitivity Index that identifies which customers would have a significant change in Probability of Default (PD) if they had a sizeable change in their credit card balance

• An indebtedness score, developed using a combination of credit data and income information supplied by the customer

• A Current Account Turnover Score and Index, which provides an indication of consumer affordability using Current Account Turnover data provided to Equifax by UK lenders.

All of the solution’s 46 decision keys are designed for integration and deployment in FICO TRIAD Customer Manager, which is used to manage most UK card accounts. The information it delivers can be used in TRIAD decision strategies for credit line increases and decreases, and other account management decisions.