@smallfry wrote:
@Anonymous wrote:
@smallfry wrote:
Curious business model FICO has. I never opted to get the free EQ from DCU. However I now get free EX from PSECU and some form of TU free as long as that lasts from Walmart/GEMB. You can get a discounted EQ from EQ itself for 11 bucks now. Why would FICO think anyone would want to pay 15 bucks for a score let alone 20. I have no idea why they would think raising their price is a good idea.
I'm guessing they must charge the banking/credit card institutions for the scores and make more from that than from the individual consumers buying scores due to sheer volume.
So what do you think Walmart is paying for the TU score? I maintain they would make more money charging the public much less for a package deal.
I should have said I suspect Fair Isaac corporation generates more ”business-to-business revenue” than “myFICO business-to-consumer services revenue.”
Their myFICO is service is but one part of Fair Isaac, and not the biggest revenue generator. Their myFICO service "provide[s] solutions based on our analytics to consumers, sold directly by us or through distribution partners."
Skimming their annual report from 2010, Applications is their largest source of revenue. It states, "We develop industry-tailored Decision Management applications, categorized as Applications, which apply analytics, data management and Decision Management software to specific business challenges and
processes. These include credit offer prescreening, insurance claims management and others." Applications comprised 61% of revenues for fiscal year 2010 (page 35 of the annual report). From the same page, "Scores," which includes business-to-business and business-to-consumer revenue, comprises 28% of revenues for fiscal year 2010.
On page 11, "The FICO Scores are calculated based on proprietary scoring models. The scores produced by these models are available through each of the three major credit reporting agencies in the United States: TransUnion, Experian and Equifax. Users [I take this to mean lenders] generally pay the credit reporting agencies
scoring fees based on usage, and the credit reporting agencies share these fees with us."
I don't know what financial arrangements there are between Fair Isaac, TU, and Walmart/GEMB, but since FICO scores are based on a proprietary model, someone somewhere is paying Fair Isaac for them. Or they are trying to maintain market share in the competitve environment where the credit bureaus are trying to market their own credit scores to lenders and consumers.
I don't mean to thread-jack. And these are my speculative thoughts. But reading through the annual report is revealing.
Starting Score (08/11/11): TU08: 643