FAIR ISAAC CORP (FICO)

Fair Isaac Corp was founded in 1956 based on the idea that smart use of data can help businesses make better decisions. Today, FICO provides software and the well-known FICO Score to help companies analyze data, find new opportunities, and make important decisions quickly and at a large scale.

The FICO® Score is the standard measure of consumer credit risk in the U.S.

Most major banks and credit card companies use FICO’s solutions, along with insurers, retailers, phone companies, car lenders, credit bureaus, government agencies, and many other businesses.

FICO also help people by offering online services where they can check and understand their FICO Scores - the standard way in the U.S. to measure how risky someone is as a borrower. This helps people improve their financial knowledge and manage their money better.

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Financial Snapshot

Income Statement (*values displayed in millions)

How do they make money?

• FICO Scores (Credit Scores): The FICO Score is a three-digit number between 300 and 850 that shows how trustworthy someone is when borrowing money. FICO uses proprietary algorithms to analyze credit data from the three big credit bureaus in the US: Experian, TransUnion, and Equifax.

  These scores are used by banks and lenders throughout a person’s credit journey - from deciding whether to approve a loan, managing existing accounts, to creating marketing offers for financial products.

  When a lender checks someone’s FICO Score, they pay the credit bureaus, and the bureaus share part of that fee with FICO. Essentially, anytime someone submits an application for a loan, FICO gets paid!

• Software Solutions: FICO develops advanced software tools to help companies make automated decisions based on data analysis. These tools are used for:

  • Fraud Detection: Identifying and preventing financial fraud in real time.

  • Risk Management: Assessing the creditworthiness of borrowers.

  • Customer Engagement: Optimizing marketing offers and customer interactions.

  • Debt Collection: Helping businesses improve recovery of overdue payments

Good Time to Buy?

At the time of writing, FICO is down 25% since it’s November 2024 52 Week High of 2402/share. The FICO score was introduced in 1989 and will seemingly continue to play an important role in the United States economy. In fact, we believe it’s safe to say that this company has zero competition! Thus, this temporary 25% discount of FICO seems like a great deal to us.

FYI