While Fair, Issac, and Company (FICO) was founded in 1956, the first FICO credit bureau risk score was not produced until 1982. In 1989, the first industry-standard FICO credit score was developed, and the formula has remained the same throughout the decades. In 1995, Fannie Mae and Freddie Mac started requiring FICO scores for mortgage lenders. As Fannie Mae and Freddie Mac still currently support around 70 percent of the mortgage market, the backing of these programs was a huge boon for the success and persistence of the FICO credit score. As of 2018, more than 90 percent of top lenders use FICO scores.
As the FICO credit score — and the credit rating system as a whole — does not exist in a vacuum, there are still discriminatory effects of the score and these systems on communities of color. The types of credit traditionally used by communities of color (e.g., payday lenders) are penalized by credit scoring. Additionally, factors like rental payments are generally not included in credit scoring. This prevents individuals and families who rent their housing from receiving the credit score benefits automatically given to those who pay a monthly mortgage. While there has been a push in recent years to end discrimination on credit types and to add in rent, utility, and insurance payments — especially as homeownership becomes less and less of a possibility for the average American — there is still a long way to go in order to ameliorate the discriminatory effects that have accrued over time.