When was the credit score invented?

The modern credit scoring models date back to 1958 when Bill Fair and Earl Isaac created Credit Application Scoring Algorithms. According to FICO®, their scores are used by 90% of all banks and other creditors today. The modern FICO score, which is applied to the general public, was just first introduced in 1989. Established in 1956, the company worked with individual businesses to develop credit scoring systems. It was only in 1989 that FICO worked with national credit bureaus to develop the universal credit scoring model which we use today.

Credit reporting agencies existed as early as 1841. These agencies had correspondents who collected information such as credit history, age, income, ethnic background, etc., and entered them into a ledger that was then centralized in New York City. But this information reported a lot of subjective information (like race and gender) and would often result in subjective judgments rather than objective evaluations.

Credit reporting became more popular in the late 19th century with the introduction of department stores. Computerization in the 1960s helped consolidate credit reporting. Today, of the more than 2000 credit reporting agencies, there are three major ones – TransUnion®, Equifax®, and Experian®. These bureaus compile consumer credit reports.