Rating a credit application by scorecard · Ceded (since 1958)

In 1958, Fair, Isaac and Company, founded two years earlier by the engineer Bill Fair and the mathematician Earl Isaac, sold its first statistical scorecard, which predicted repayment from a handful of application fields instead of from a loan officer's reading of the applicant.

This entry is about the instrument rather than the decision it feeds. Before the scorecard, a clerk rated an application against a written policy and a manager's habit, and the file recorded the outcome without recording the weights. Fair, Isaac turned the weights into a table fitted to repayment data, which made the rating repeatable, cheap enough to run on every small consumer account, and for the first time testable for disparate treatment. The scorecard is now the ordinary form of the judgment across cards, car loans and store credit, and almost nobody rates an application by hand. Where the cut-off falls, which data may enter the table, and who hears the appeal are still set by people.