LendingClub’s Steve Allocca Comments on FICO’s New Scoring Model

Steve Allocca is skeptical that the announcement this week of FICO 10, the new credit scoring model from Fair Isaac, will have any impact for lenders like LendingClub; the new scoring model will be launched later this year and it will cause changes in credit scores of up to 20 points for millions of consumers; the FICO score looks only at historical financial information for consumers and Allocca said that is no longer enough; modern lenders like LendingClub use the FICO score as just one input into a multi-faceted custom credit model; he said, “In an age where your whole financial life is verifiable digitally, instantly, with a customer’s permission and credentials why would you think that just historical loan performance would be a better indicator? PYMNTS

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