FICO profits likely to be on low end
In a tight economy, consumers aren't as quick to pay for credit checks. How is this affecting Fair-Isaac, the credit-scoring company? Ashley Milne-Tyte reports.
Giving yourself a credit check (iStockPhoto.com)
More on America's Financial Crisis
TEXT OF STORY
Steve Chiotakis: Let's take a step away from the election results and look at some other numbers that have consequences. You know those credit scores that are ever so important when it comes to buying a house or car? Well the company behind the so-called FICO scores -- Fair Isaac -- issues its results later today. Has the environment of tight credit, where people are fretting over their scores, benefited Fair Isaac? Here's Ashley Milne-Tyte.
Ashley Milne-Tyte: You might think anxious consumers would be checking their credit scores right now. But not ones they have to pay for, like the FICO score.
Michael Nemiroff is an analyst with Wedbush Morgan Securities. He says most of Fair Isaac's credit score business actually comes from companies. Big financial firms use the FICO data to check their customers' credit when they want to make a big purchase --- a house, a boat, even a washer-dryer.
Michael Nemiroff: So based on what's been going on with the economy for the last couple of quarters and the fact that most consumers are not exactly going out and buying these big-ticket items in droves, I would expect that the volumes of their scoring business would actually be declining.
And, he says, if there's less credit scoring going on, that's likely to mean lower profits for Fair Isaac.
In New York, I'm Ashley Milne-Tyte for Marketplace.
Comments
Comment | Refresh
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.