Bill Fair and Earl Isaac began building a credit scoring system in 1958. They delivered their first credit card scoring system in 1970. By 1975, existing customer behavior scoring was added to their system. The current system utilizes payment history, current level of debt, types of credit utilized, length of credit history and existing credit outstanding, to determine credit risk. By 1981, Fair Isaac had begun issuing their own database of calculated credit scores.

Fair Isaac went public in 1986 as they moved forward in the development of credit managment systems. In 1991 they introduced the TRIAD, credit card management system. TRIAD utilizes data from multiple accounts and arrives at credit worthiness scoring by using a wide cross section of information about a customers credit history. Triad was an early success and is the basis for most of the credit scoring utilized today.

In 2002 Fair Isaac Merged with HNC Software, Inc. HNC has excelled in the areas of risk management, fraud prevention, insurance claims analysis and a host of other financial risk assessment applications. Fair Isaac's reported focus in this merger seemed to be mainly fraud prevetion but it cannot be denied that HNC had much more than that to offer to the deal.

In 2004 Fair Issac acquired London Bridge Software which then allowed them to include credit collections and asset recovery software applications in their financial software arsenal. This was a natural move for the company and has served to round out their corporate direction picture. London Bridge was a world wide leader in customer interactive software for credit lending and mortgage institutions.

In 2005 Fair Isaac acquired RulesPower. This move was widely touted as a major coup for them. The "wow factor" is surrounded by the acquiring of the RETE III based inference engine technology. It is said that this technology has given Fair Isaac the ability to market new higher performance algorithms and statistical methodology in a cartridge form compatible with their existing products. Analysts found little to no downside in the move. It would seem that the RETE III acquisition was the meat and potatoes of the deal when you consider that the rest of the purchase is referred to as "other assets".

If you're looking for a place for some long term investing, Fair Isaac would seem a very logical place to start. After all, the business of credit reporting isn't going away any time soon and there appears to be a consolidating of the competition taking place in the game of providing the technology base for these reporting operations. Fair Isaac has done some very smart growing and I greatly respect their position. There's a weekend worth of good reading at this link, if you want a very well rounded picture of Fair Isaac's scope. Besides, if you tell them that I sent you over there, maybe they'll bump my credit score up a bit... but I won't hold my breath waiting for that to happen.

(photo courtesy of Norton Sales)