1. © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. FICO ® Score 9: Product Showcase The Most Current and Predictive FICO ® Score Frederic Huynh Senior Principal Scientist, Analytic Development—Scores FICO

2. © 2014 Fair Isaac Corporation. Confidential. 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. 2

3. © 2014 Fair Isaac Corporation. Confidential. FICO ® Score 9 Outperforms All Prior FICO ® Score Versions Across All Industries and Lifecycles. 3

4. © 2014 Fair Isaac Corporation. Confidential.4 ► Grow portfolios safely, make better decisions with more accurate Scores ► More predictive score based on current consumer behavior and evolving credit landscape ► Newer data set and more appropriate treatment of select populations Be Current ► Comply more easily and confidently with existing US regulations ► Enhanced support for regulatory compliance/model governance Be Compliant ► Gain without the pain ► Backward compatibility eases adoption ► Limited IT and operational impacts: same minimum score criteria, reason codes, odds-to-score relationship, and score range Be Adaptive FICO ® Score 9 Benefits Summary

5. © 2014 Fair Isaac Corporation. Confidential. Media and Market Reaction to FICO ® Score 9 “Changes Could Lead to More Bank Lending, Easier Credit for Some Consumers” The Wall Street Journal “…we welcome steps by industry to adjust how it weighs medical debt…” Moira Vahey, CFPB Spokeswoman “This move will ultimately make a real difference in the lives of millions of Americans…” Steve Brown, President, National Association of Realtors “The new FICO 9 model, according to the Federal Reserve, will provide best-in- class predictive power across all major credit product lines…” “Lenders believe the new standards will have a positive impact on the economy…” “Medical debt will carry less weight in FICO’s new credit-score model” The Washington Post 5

6. © 2014 Fair Isaac Corporation. Confidential. FICO ® Score 9 Informed by Changing Landscape Change 23% 16% Numerous changes have occurred since FICO ® Score 8 was developed: ► Fewer new accounts are being opened ► Decrease in consumers with new account openings ► Mortgage crisis and the ensuing great recession ► Consumers are seeking credit less often ► Decrease in consumers with recent inquiries 6

7. © 2014 Fair Isaac Corporation. Confidential. ► Recent development sample revealed 31% drop in the proportion of origination bads relative to all bads ► Innovative approach required to address these dramatic changes FICO ® Score 9 Informed by Changing Landscape FICO ® Score 8 Development Sample (2006–2008) Composition of Bads: Existing Accounts vs. New Accounts FICO ® Score 9 Development Sample (2011–2013) Composition of Bads: Existing Accounts vs. New Accounts 7

8. © 2014 Fair Isaac Corporation. Confidential. ► Facet 1: Exhaustive, cross-industry data driven characteristic selection ► Identify out-of-model predictors stronger for key industry use cases ► Collection characteristics are predictive in predicting originations risk ► Assess the weaknesses of a general model for key industry use cases at the component level ► Facet 2: Incorporate Multiple Goals Scorecard Technology ► Primary performance variable remains general risk (originations and account management) ► Secondary performance variable focuses on originations risk ► Use of Multiple Goals Scorecard Technology consistently strengthened originations validation results on out of time sample ► KS lift observed up to 1.0 on originations validations Multi-Faceted Modeling (MFM) Methodology 8

9. © 2014 Fair Isaac Corporation. Confidential. Exhaustive, cross-industry data driven characteristic selection Identify out-of-model predictors stronger for key industry use cases Collection characteristics are predictive of originations risk Assess the weaknesses of a general model for key industry use cases at the component level Incorporate Multiple Goals Scorecard Technology Primary performance variable remains general risk (originations and account management) Secondary performance variable focuses on originations risk Multiple Goals Scorecard Technology consistently strengthened originations validation results on out of time sample Multi-Faceted Modeling (MFM) Methodology 9 Facet 1: Facet 2: KS lift observed up to 1.0 on originations validations

10. © 2014 Fair Isaac Corporation. Confidential. FICO ® Score 9 Vs. Earlier Versions of the FICO ® Score ► Comparison Charts 10

11. © 2014 Fair Isaac Corporation. Confidential. KS Statistic FICO ® Score 9 Is More Powerful and Outperforms FICO ® Score 9FICO ® Score 8Prior FICO ® Score All Industries, New + Existing Accounts62.160.359.2 All Industries New Accounts55.854.452.8 All Industries Existing Accounts62.861.059.9 Bankcard New Accounts59.457.956.3 Bankcard Existing Accounts63.360.859.4 Auto New Accounts56.455.254.8 Mortgage New Accounts59.956.655.0 Mortgage Existing Accounts64.763.462.7 11

12. © 2014 Fair Isaac Corporation. Confidential. Swap Odds Analysis, All Industries, All Accounts FICO ® Score 9 Predicts Future Risk Better Across the score spectrum, better performing records are being swapped above, and poorer performing records are being swapped below. Score Cutoff FICO ® Score 8Swap SetSwap Set Odds* % Above% Below % Swapped Above % Swapped Below Swapped Above Swapped Below 58087.212.81.9 5.13.3 62079.220.82.61.58.95.5 66070.030.03.31.616.59.3 70059.740.33.62.534.517.1 74047.552.54.13.178.442.2 *Bad = 90+DPD 12

13. © 2014 Fair Isaac Corporation. Confidential. Interval Score Distribution: All Consumers—National Population Slight Shift to Higher Score Ranges 13

14. © 2014 Fair Isaac Corporation. Confidential. Interval Score Distribution: Thin File Records (# Trade Lines ≤ 3) FICO ® Score 9 More Effective Assessing Thin File Risk 14

15. © 2014 Fair Isaac Corporation. Confidential. Trade Off Curve Comparison: All Industries—Thin Files (# Trade Lines ≤ 3) FICO ® Score 9 Stronger Prediction in Thin Files 15

16. © 2014 Fair Isaac Corporation. Confidential. ► FICO ® Score 9 enhancements to the treatment of collection agency accounts: 1.All paid collection agency accounts will now be excluded from the score calculation 2.Unpaid medical collection agency accounts will be assessed differently from unpaid non-medical collection agency accounts Revised Treatment of Collection Agency Accounts Note: These specific FICO ® Score 9 enhancements do not apply to 1 st party collection accounts. 16

17. © 2014 Fair Isaac Corporation. Confidential. FICO ® Score 9 Enhancements to the Treatment of Collection Agency Accounts Revised Treatment of Collection Agency Accounts Unpaid Medical Collections Unpaid medical collection agency accounts will be assessed differently from unpaid non-medical collection agency accounts Paid Collections All paid collection agency accounts will now be excluded from the score calculation Note: These specific FICO ® Score 9 enhancements do not apply to 1st party collection accounts. 17

18. © 2014 Fair Isaac Corporation. Confidential. All Industries: New and Existing Accounts (Segment: files whose only derog item is a medical collection) Risk Prediction Improved By Ignoring Paid Collections 18

19. © 2014 Fair Isaac Corporation. Confidential. Bad Rate Comparison: Files With Unpaid Medical Collections Vs. Unpaid Non-Medical Collections Differential Risk Between Medical and Non-Medical Collections Files with Unpaid Medical Collections 19

20. © 2014 Fair Isaac Corporation. Confidential. FICO ® Score 9 Has More to Offer Prior FICO ® ScoreFICO ® Score 8FICO ® Score 9 Development Time Period—Equifax7/1998–7/20004/2006–4/200810/2011–10/2013 Development Time Period—TransUnion10/1998–10/20004/2005–4/200710/2011–10/2013 Development Time Period—Experian10/2000–10/200210/2005–10/200710/2011–10/2013 Predictive Value Improved Scorecard Segmentation Improved Authorized User Treatment Improved Thin File Treatment Improved Collections Treatment 20

21. © 2014 Fair Isaac Corporation. Confidential. ► FICO ® Score 9 ► Serves as the core for the FICO ® Score solutions ► FICO ® Score Suite ► Industry Scores ► Active Research and Development ► Current pilots based on CRA and Alternative Data ► Intended to score more consumers, responsibly FICO ® Score: What’s Next? 21

22. © 2014 Fair Isaac Corporation. Confidential. Access to FICO ® Score 9 (Base Score) Base ModelGeneral Availability EquifaxOctober 2014 TransUnionNovember 2014 ExperianEarly 2015 Industry Scores software delivery to CRAs targeted for first quarter calendar year 2015. Working with CRAs on implementation and targeted available dates. 22

23. © 2014 Fair Isaac Corporation. Confidential. FICO ® Score 9 ► Be Current: ► Grow with more accurate scores based on today’s consumer credit behavior ► Be Compliant: ► The most current, fully documented FICO ® Score ever ► Be Adaptive: ► Backward compatibility eases adoption and impact to operations The Most Current and Predictive FICO ® Score 23

24. © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. Frederic Huynh fhuynh@fico.com (415) 492-5323 Thank You! 24

25. © 2014 Fair Isaac Corporation. Confidential. Learn More at FICO World Related Sessions ► The FICO ® Score: 25 Years of Democratizing Access to Credit ► Fact vs Fiction: Demystifying Credit Score Features Products in Solution Center ► Unveiling FICO ® Score 9—Your Credit Score for the New Normal Experts at FICO World ► Frederic Huynh ► Julie Wooding White Papers Online ► To Score or Not to Score? #70 Blogs ► www.fico.com/blog 25

26. © 2014 Fair Isaac Corporation. Confidential. Please rate this session online! 26 Frederic Huynh fhuynh@fico.com