The latest version of FICO Small Business Scoring Service has been released. The new credit scoring platform will let banks respond quickly. It will also help ensure compliance with federal lending regulations.
The technology incorporates expanded data and analytics to help banks assess their risk when deciding whether to extend credit to small businesses. Banks will be able to access past payment information for small businesses, including loans, leases, credit cards and other lines of credit through the Small Business Financial Exchange (SBFE) and Equifax, one of the three main credit bureaus.
28 million small businesses in DB
This will help banks get the big picture for a business, including its payment history and obligations before deciding whether or not to extend credit. More than 28 million small businesses will be represented in the database and information will be furnished by over 400 SBFE members.
This new credit scoring tool, known as FICO SBSSSM 7.0, can be accessed through a cloud-based platform used by hundreds of credit issuers. FICO has also introduced a small business bankruptcy score to shed light on a company’s financial risk picture. The system will allow issuers to make decisions on credit lines and loans up to $1 million and leasing transactions up to $250,000.
Better offers for businesses
The new release is “the culmination of our most advanced modeling technology and techniques, combined with 20 years of FICO small business analytic experience and insight from everyday use by top small business credit grantors,” said David Lightfoot, FICO’s VP of product management.
Banks will be able to make more competitive offers to small businesses based on the new FICO scores, compared with other small business scoring models, he noted.