The History of Credit Scores

Bill Fair and Earl Isaac

In 1956, friends Bill Fair and Earl Isaac established Fair Isaac Corporation to develop and market their credit scoring concept. Initially located in a small apartment in San Rafael, California, Fair Isaac has grown into a NYSE traded company with annual revenues in excess of 600 million dollars. Their credit scoring model is known as FICO.

The Number that Changed the World

In the early years, Fair Isaac marketed their scoring system to financial service companies seeking to make faster and more accurate credit decisions. In 1989, as businesses were discovering the power of computerization, Fair Isaac introduced an automated credit scoring software package that was quickly embraced by credit card issuers. But the big catalyst for the near universal acceptance of credit scoring came in 1995 when mortgage giants Fannie Mae and Freddie Mac stipulated that mortgage lenders incorporate FICO scores in their approval process. The rest is history.

Life, Credit Repair, and FICO

There are other credit scores, and most are hopeful of making market inroads; some, like the Vantage Score, are contenders. For now, the clear leader and the one that matters to your credit repair effort, is the FICO score. It is a practical reality; lenders, with few exceptions, use FICO. And when it comes to our credit repair program, everything from the dispute letters we write to the credit management suggestions we make to our clients revolve around the mechanics of FICO.