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FICO Scores Soar: Credit Scoring Giant Expands Beyond Core Business
6 Sep
Summary
- FICO's credit scoring business remains highly profitable, with 88% operating margins
- FICO Platform, the company's cloud-based decision management software, is a key growth area
- FICO's near-monopoly status in credit scoring gives it pricing power and a "tollbooth" position
As of September 6th, 2025, Fair Isaac (NYSE: FICO), the company behind the widely-used FICO credit score, is undergoing a significant transformation. While its credit scoring business remains the bread and butter, generating high-margin revenue, the company is also making strides in diversifying its offerings.
The FICO score continues to be the standard for consumer creditworthiness, with over 90% of top U.S. lenders using it. This franchise has near-monopoly status, allowing FICO to maintain an impressive 88% operating margin. The demand for FICO scores is steadily growing, and the company's pricing power remains strong as lenders cannot easily swap to alternatives without facing credibility and compliance issues.
However, Fair Isaac is not resting on its laurels. The company is increasingly focused on expanding its FICO Platform, a cloud-based decision management software that enables banks and enterprises to automate various financial processes, from loan approvals to fraud detection to marketing personalization. This "second act" for the company aims to position FICO as the operating system for financial decision-making.
With its core credit scoring business still going strong and its diversification efforts into software, Fair Isaac is poised to drive meaningful growth over the next few years. The company's ability to leverage its dominant position in credit scoring and capitalize on the growing demand for automation and cloud-based solutions could solidify its position as a key player in the financial technology landscape.
