What is the mathematical formula used to derive a FICO score?  (I need
the exact formula)  This formula is used by Experian, Trans Union, and
Equifax. This is the score used by lenders to evaluate credit
worthiness.  If there is
a software program that is available to use this mathematical formula
it would be handy to know that too, however not required to answer the
question.

Hi slickricky:

Sorry, but...

Your Credit: What's in a Number?
URL: http://www.businessweek.com/smallbiz/content/feb2001/sb2001028_877.htm
Quote: "The formula used by the three major credit bureaus and
emulated by iPlace Inc., which provides credit scores to consumers
online, is based on information in a credit report. The exact formula
-- developed by Fair, Isaac & Co., and known as the FICO score -- is a
company secret. The iPlace formula, too, is proprietary. 'That would
be like giving the recipe for the secret sauce,' says Laurie Edwards,
iPlace's vice-president for communications."

websearcher-ga

Hey slickricky,

I'm going to confirm websearcher's statement, and add some information
you may find useful:

Credit Scoring – FTC  
http://www.ftc.gov/bcp/conline/pubs/credit/scoring.htm 
 
"The actual formula for determining FICO scores isn’t known, but the
following approximated factors come into play:
 
35% Payment history 
30% Outstanding debt 
15% Length of your credit history 
10% Recent inquiries on your credit report 
10% Types of credit in use "
 
Credit Scoring 
http://cobrands.business.findlaw.com/debt/nolo/ency/CFEE8F98-D0D8-4D64-A040221D061458E5.html

I would suggest you also look at the following previously asked
questions:

https://answers.google.com/answers/main?cmd=threadview&id=118257
https://answers.google.com/answers/main?cmd=threadview&id=91254 

Cheers,
answerguru-ga

I understand that the score is proprietary.  So is McDonald's special
sauce but the recipe for that could be figured out too.

P.S. Not trying to be snooty or anything, I just can't believe no one
has figured out the formula.

Although I haven't yet come across the formula, you should keep in
mind that even if the proprietary formula were available somewhere, we
as researchers cannot post that type of information in this forum as
stated in the GA Researchers agreement.

answerguru-ga

It is my understanding that not only is the formula proprietary, but
that it would be out of date almost as soon as you got your hands on a
copy of it.  Fair, Isaac & Co. continuously revise their formula to
reflect the latest statistics vis-a-vis credit statistics vs. actual
credit performance.

The problem with your analogy is that several thousand people make the
secret sauce for McDonalds and only two or three people ever see this
formula in its entirety.  It might make more sense to you if you look
at Fair Isaac’s business model.  There are several, probably hundreds,
of companies supplying credit score right now, but FICO stays ahead of
them because it: A). Brought the idea to market, and B). Has what is
widely accepted as the best model out there.

FICO makes money several ways:
1.	Supplying scores to consumers.  I’m pretty sure that this is a very
small portion of their portfolio, but one that could see increasing
profits if they can turn their B2C site into a major “consumer portal”
2.	Supplying score to businesses.  This is by far the mother load. 
When those nasty little credit card companies want to know which
consumers fit within their risk model – they pay a small fee to FICO. 
When companies check their existing customer’s credit to see if they
can upsell them on anther service, guess who supplies the model?
3.	Insurance scores, decision models, etc.  A small but growing force
in the company.

Essentially, FICO scores data that it is passed, and rarely do they
generate data of its own.  This is true of the three major bureau’s as
well.  They pass credit profiles to FICO who then spits out a score.

So, these all have one thing in common.  They rely on Fair Isaac being
the only one out there with their self-proclaimed “gold standard”
analytics. They employee hundred of “propeller heads” to do that.

Given that, if the FICO score formula was public, don’t you think
someone would have opened up “Bob’s Credit Score and Bait Shop” by
now?