The acronym FICO is frequently referred to when the topic of credit scoring is discussed. What does it mean?
FICO stands for the corporation that developed it: Fair Isaac Corporation, named in 1956 after its founders Bill Fair, an engineer, and Earl Isaac, a mathematician. It’s a complex credit-scoring formula that assesses the risk a borrower may default.
The first credit bureau-based credit scoring system was introduced by Fair Isaac in the mid 1980s, but it did not really take off until 1995 when two major companies, Fannie Mae and Freddie Mac, which purchase almost two out of every three real estate loans, recommended that lenders use FICO scores.
