Posts tagged equifax efx
Analyst Calls: ANDS, AZO, CHRW, CR, CRM, FDO, GIS, K, NAV, ORCL …
Jun 10th
Filed under: Analyst Reports, Analyst Upgrades and Downgrades, AutoZone Inc (AZO), Kellogg Co (K), Family Dollar Stores (FDO), General Mills (GIS), Oracle Corp (ORCL), Analyst Initiations
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Analyst Upgrades
- Baird upgraded C.H. Robinson (CHRW) to outperform from neutral and has a $67 target on the stock. The firm upgraded shares citing growth opportunities given the capacity constrained environment.
- UBS upgraded Navistar (NAV) to buy from neutral, citing improved trucker preferences towards the company’s engine technology.
- KeyBanc upgraded Crane (CR) to buy from hold based on valuation stabilization and potential upside in aerospace, among other reasons. The firm has a $39 target on the stock.
- United Therapeutics (UTHR) was upgraded to overweight from neutral at JPMorgan.
- Equifax (EFX) was upgraded to overweight from equal weight at Stephens.
- Brown & Brown (BRO) was upgraded to buy from hold at Citigroup.
Continue reading Analyst Calls: ANDS, AZO, CHRW, CR, CRM, FDO, GIS, K, NAV, ORCL …
Analyst Calls: ANDS, AZO, CHRW, CR, CRM, FDO, GIS, K, NAV, ORCL … originally appeared on BloggingStocks on Thu, 10 Jun 2010 11:30:00 EST. Please see our terms for use of feeds.
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In the War on Credit Scores, FICO Loses a Battle
May 14th
The use of credit scoring is vital to the mortgage underwriting process. However, behind the scenes, a war is raging over who can lay claim to that process, with one party recently losing ground in the courtroom.
The Fair Isaac Corp. (FICO: 23.46 +3.90%) was denied a new trial regarding what it claims is clearly its trademark; that is, the act of rating an individual’s credit on a scale of 300 to 850.
However, VantageScore Solutions the credit rating provider created by America’s three major credit reporting companies — Equifax (EFX: 32.80 -1.32%), Experian and TransUnion — successfully argued that its system that rates credit on a scale between 501 to 990, is not in violation of the FICO trademark.
The presiding US district judge in Minnesota, Ann Montgomery, went a step further and called for FICO’s trademark to be invalidated in her verdict.
In her decision, Montgomery addressed the jury’s finding stating, “Indeed, the jury’s verdict was a wholesale, unambiguous rejection of Fair Isaac’s central theory of the case — i.e., that one can legitimately claim trademark protection in the numerical range for credit scores.”
VantageScore Solutions CEO Barrett Burns said that the court’s decision confirms the longstanding position that FICO’s claims are “meritless,” and “at every step, VantageScore has prevailed against Fair Isaac’s claims.”
“Should FICO appeal, we remain confident we will prevail there too,” Burns said.
And FICO has the full intention of appealing, according to Craig Watts, a director of public affairs at Fair Issac. As to be expected, he said that FICO strongly disagrees with Montgomery’s verdict.
Watts added that the basic tenants of the case surround fairness and consumer protection, not against the numerical methodology for presenting that value, especially as it pertains to the sale of those scores to mortgage lenders, for example.
“Nothing has changed as a result of this order,” he said, “the defendants have not been held accountable for copying what it took FICO 20 years to build; and consumers will continue to be victims of big-budget ad campaigns that trick them into buying knock-off scores that they think are the genuine FICO scores lenders use to make decisions.”
Write to Jacob Gaffney.
Disclosure: the author holds no relevant investments.
Looking to the Financing Future: FICO 8 Gets an Add-On
Apr 14th
FICO (FICO: 25.38 +0.83%), the credit score provider owned by the Fair Isaac Corp. teamed up with Equifax (EFX: 35.60 +0.56%) and Moody’s Analytics to launch a new product that helps lenders predict borrower behavior in order to better anticipate account and portfolio risk in light of shifting economic events.
The new FICO 8 add-on, unveiled April 13 at a trade show in Miami, is called the Economic Impact Index (EII), which can be used in credit policy management, performance monitoring and portfolio stress-testing across six different economic scenarios, according to Mike Harvey, vice president of Equifax Strategic Alliances. By implementing EII, FICO hopes to reduce the gap on risk expectations for borrowers.
The adjustments can be seen in the following two graphs, provided to HousingWire and part of the FICO presentation today.
Here is the score without the EII:
And with the EII:
“Strong demand in the marketplace drove development of this product,” Harvey said. “What was discovered during the current recession is that FICO risk scores were continuing to measure credit behavior and, at the same time, lenders wanted additional tools to help them navigate the potential impact of changing economic conditions.”
He adds: “The Economic Impact Indicator is one solution among a number of other Equifax tools and data assets that can give lenders a 360 degree view of their portfolios. As a result, there is strong interest among today’s mortgage finance customers who want greater insight into the economic risk associated with mortgage portfolios.”
Careen Foster, a director at FICO explains that lenders today make economic adjustments by tightening and loosening credit policies and the index provides a more scientific way of approaching those changes.
Foster set aside fears that the EII may restrict access to credit by borrowers. “Depending on how lenders use the new tool and what happens in the economy, [the add-on] could result in more consumers qualifying then they would had lenders not used FICO Economic Impact Index,” she said.
Lenders that adopt FICO Economic Impact Index gain access to economic intelligence based on dozens of key economic indicators, including unemployment, gross domestic product, interest rates, housing prices and foreclosures. With economic forecasts updated quarterly, the Index provides lenders with an analytically objective basis for adjusting their underwriting policies, account treatment, reserve levels and capital requirements.
Users of the EII can adopt up to six different economic scenarios. In the first scenario, for example, consumer confidence rebounds and the economy is recovering quickly. In the third, by way of comparison, the scenario is prolonged retrenchment, leading to a very severe recession.
The EII adjusts accordingly when each scenario is selected. The model depicts a 24-month horizon of borrower behavior.
Write to Jacob Gaffney.
Disclosure: the author holds no relevant investment positions.
