Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation's express consent. © 2010 Fair Isaac Corporation. 1 Customer Risk, Customer Affordability and the Consequences of Economic Impact All That From a Bureau Score? November 2010 Brian Cooper Senior Director, Credit Bureaus & Scores FICO

© 2010 Fair Isaac Corporation. Confidential. 2 Forward-Looking Statements Product roadmaps and similar marketing materials should be considered forward looking and subject to future change at FICO’s discretion. Future functionality, features or enhancements as shown are FICO’s current projections of the product direction, but are not specific commitments or obligations.

© 2010 Fair Isaac Corporation. Confidential. 3 FICO Worldwide Score Deployment Saudi Arabia UK Canada US Mexico Brazil Turkey Taiwan China Australia Japan India South Africa Positive Data Sharing Negative Only Data Sharing Panama Ireland Saudi Arabia UK Sweden Canada US Mexico Brazil Turkey Poland China Australia Thailand South Korea India FICO ® score solution deployed Bahrain Russia FICO ® score solution available at Credit Bureau Romania Peru Egypt Singapore

© 2010 Fair Isaac Corporation. Confidential. 4 Challenges for UK Lenders Consumer Credit Directive Basel Economic Uncertainty Regulatory Scrutiny Responsible Lending Affordability Reduce Costs Increase Returns

© 2010 Fair Isaac Corporation. Confidential. 5 UK Credit Risk Manager’s Wish List »This is what you are telling us you want in terms of bureau score capabilities:  Best in class scores at better value point  Innovation to improve decision quality, now and into the future  Low investment to access such innovation  Additional power in scores by combining data sources  Competitive offerings to improve value available in market  Speed to market in line with budget cycles  Full range of scores across credit life cycle

© 2010 Fair Isaac Corporation. Confidential. 6 © 2009 Fair Isaac Corporation. Confidential. 6 FICO’s Solution: Combine the 4 best internationally proven Scoring innovations, make them UK specific and offer them at a market redefining value point FICO: make every decision count

© 2010 Fair Isaac Corporation. Confidential. 77 © 2010 Fair Isaac Corporation. FICO Solution: Enhanced 360 Degree Risk View Risk View UK Specific range of FICO ® Scores Market View FICO ® Score Trends Service FICO ® Score Trends Insights Report FICO ® UK Economic Impact Index Macro View FICO ® UK Credit Capacity Index ™ Opportunity View Ascertain future value & ability to take manage additional debt Determine risk of repayment for lifecycle lending, setting rates & controlling loss Assess market performance - competitive position to inform strategy decisions Quantify economic impact on credit risk

© 2010 Fair Isaac Corporation. Confidential. 8 Analytics generated based on individual credit report data 1.Predict consumer credit risk (90+ DPD) over 2 years » FICO ® Score – higher score = lower risk 2.Predict consumer’s capacity to safely manage additional debt » FICO ® CCI – 0-9 index; 9 = high capacity; rank orders for capacity within FICO ® Score bands 3.Adjust FICO ® Score to adjust for future economic risk » FICO ® EII – adds/subtracts ‘n’ points based on economic scenario* Plus FICO ® Score Trends Service or Insights Report 4.Time series FICO® score distribution and performance trending by market segments » Evaluate portfolios relative to industry to guide business direction » Drill down reporting facility for analysts to compare the trends in FICO ® Scores by time/portfolio *Economic adjustments developed and generated by FICO based on commercial forecast data provider – delivered to CRA for automatic inclusion – updated frequently to maintain rolling forecast – may include option to select multiple forecast scenarios Risk, Opportunity, Macro, and Market Views Interdependent Bureau Scoring Analytics

© 2010 Fair Isaac Corporation. Confidential. 9 Risk View FICO ® Score HEADER RECORD (IDENTIFYING INFORMATION) I. Wishfor Credit12 Lost Lane XYZ Limited 805 Main St. Somewhere, 6666 Supervisor Anytown, PP1 2AADate of Birth PUBLIC RECORDS (LEGAL ITEMS) Judgment 1000 ACCOUNT INFORMATION (PAYMENT PROFILE) SupplierDate Date Opening Current Account Payment ReportedOpenedBalance Balance Type Profile Bank I Card R P Bank ,5003,520 R Retail ,0007,358 I ENQUIRIES (SEARCHES) DateSubscriberType GoodBuyEQ RocketFinEQ range Empirical build on UK data Reason codes Lifecycle suite of Models

© 2010 Fair Isaac Corporation. Confidential. 10 Opportunity View Why Measure Capacity? »Consumer debt levels giving rise to concerns among: »Lenders »Regulators »Consumer Advocates »Lenders seek to balance growth while managing consumers’ ability to successfully carry incremental debt »Credit bureau risk scores generally evaluate likelihood of default (90+ DPD) »Yet consumers with the same credit bureau risk score can vary in capacity to handle debt changes Critical to assess consumers’ ability to handle incremental debt when extending credit

© 2010 Fair Isaac Corporation. Confidential. 11 Same Risk, Different Capacity (Theoretical Example) » Larry, Mary and Harry—Similar FICO ® Score…different capacities … risk impact converges at extreme debt levels

© 2010 Fair Isaac Corporation. Confidential. 12 FICO ® Credit Capacity Index TM »Empirically-derived capacity measure: »Rank-orders consumers’ ability to take on additional debt safely »Based on patent-pending Future Action Impact Modeling technology »Built on depersonalized credit report data »Delivered as 0-9 index (9 = highest capacity) »Complement to the FICO ® Score, providing additional value beyond the standard risk view

© 2010 Fair Isaac Corporation. Confidential. 13 Macro View: Economic Factors Alter Risk at Given Score Ranges »The risk at a given FICO score range shifts over different economic situations. »How do you determine when and how much to adjust strategies as economic conditions change? »For example: Alter acceptance score cutoff to maintain the same predicted loss Scenario predictions Score Log Odds P2 P1 P2 (A) P1 (A) BE1 P2 (B) P1 (B) Scenario BScenario A » Scenario A (downturn): Unemployment is expected to increase by 1%  delinquency rises - lenders increase “accepted” FICO score » Scenario B (expansion): GDP is expected to grow by 3%  repayment increases - lenders reduce “accepted” FICO score

© 2010 Fair Isaac Corporation. Confidential. 14 Incorporating Future Risk Outlook in Proactive Strategies Evaluate more frequently (reactive) »Monitor portfolio performance and adjust scores and strategies more often. Adjust to anticipated change (proactive) »FICO EII allows you to adjust strategies today based on future risk outlooks. installapplyevaluate & adjust apply new strategy Anticipate future impact and apply in advance! Successful risk management uses both proactive and reactive evaluation.

© 2010 Fair Isaac Corporation. Confidential. 15 FICO ® 8 Score Bad Rates Increasing Over Time

© 2010 Fair Isaac Corporation. Confidential. 16 FICO ® EII Drops with Worsening Economy Maintain Bad Rates by FICO ® Score Range

© 2010 Fair Isaac Corporation. Confidential. 17 Market View FICO ® Score Trends Service »Provides industry level knowledge for key segments over time. »Evaluate portfolios relative to industry to guide business direction. »Summarised findings plus drill down and customised reporting facility »Compare the distribution and performance trends in FICO® Scores over time and key market segments.

© 2010 Fair Isaac Corporation. Confidential. 18 UK Credit Risk Manager’s Wish List »FICO’s proposed solution completes this wish list Best in class scores at better value point Innovation to improve decision quality, now and into the future Low investment to access such innovation Additional power in scores by combining data sources Competitive offerings to improve value available in market Speed to market in line with budget cycles Full range of scores across credit life cycle

© 2010 Fair Isaac Corporation. Confidential. 19 © 2009 Fair Isaac Corporation. Confidential. 19 FICO’s Expectation: On a portfolio of 1 million accounts, FICO estimates benefit from FICO®360 at £3 - £6 Million

© 2010 Fair Isaac Corporation. Confidential. 20 © 2010 Fair Isaac Corporation. FICO 360° Because You Can’t Afford Not to See the Full View 1.Risk View UK Specific range of FICO ® Scores 4.Market View FICO ® Score Trends Service FICO ® Score Trends Insights Report FICO ® UK Economic Impact Index 3.Macro View FICO ® UK Credit Capacity Index ™ 2.Opportunity View

Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation's express consent. © 2010 Fair Isaac Corporation. 21 THANK YOU