Equifax Inc., an Atlanta, Georgia-based data analytics and technology solutions provider, and Fair Isaac Corp. (FICO), a San Jose, California-based data analytics company, focused on credit scoring services, as per recent reports, have announced their partnership. Both data analytics solutions providers have already started pitching each other’s solutions and selling their services to banks.
Equifax, which is still recovering from its earlier 2017’s massive data breach, is the holder of extensive data on US adults. The Atlanta-based credit giant maintains huge sets of data on US citizens that often includes their income, bank account balances, and other utility details like whether or not they pay their gas and cellphone bills. On the other hand, FICO’s software analyzes this extensive data, enabling banks and other financial institutions to get a better understanding of loan applicants.
This partnership is the latest hammer to nail effort by the companies that lay the foundation for the US consumer credit system to diversify beyond the nuts and bolts of credit reports and scores. It has been decades since US lenders have reviewed loan applicants’ reports and credit scores to come to a conclusion whether or not to approve them the loan and what interest rate to charge. After years of lending cautiously, banks are now increasingly seeking additional data that can help them understand their consumers better, and make informed decisions whether to grant loans to borrowers, including people with almost nil credit history or with blemishes.