No doubt, you are aware that Fair Isaac, the company that markets the FICO score, is a leader in consumer profiling. After all, the company offers numerous scores, from a special mortgage score to an “expansion” score meant to help those without traditional credit loans be evaluated by the way they make utility payments and rent payments. Now, though, FICO is getting into the bank deposit business, by marketing a score designed to evaluate your depositor behavior.
Financial institutions are interested in knowing as much about you as possible, so that they can assess the kind of risk you pose, as well as so that they can figure out when to offer you new products and services. FICO’s deposit scoring is being marketed to banks as a leading indicator of what you might do next. Some of the factors included in the score include:
- Account balances
- Withdrawal activity
- Deposit records
Using the formula provided by FICO, banks could see whether your banking patterns could indicate a problem ahead. Some banks might take the opportunity to impose fees on your account, or even close it altogether. If a previous bank uses the score, there is the possibility that it will be included in a report that other banks could pull up when you apply for a new deposit account. Indications of trouble might mean being denied the ability to open a deposit account at a specific insitution.
Other Ways Your Bank is Profiling You
Of course, your bank may already be profiling you. Many financial institutions make use of ChexSystems to see whether or not you have bounced a check or overdrawn your account with a debit card in the last five years. There are even some banks that will run a hard credit check on you before approving (or denying) your application for a new account. You might be surprised at the information that financial institutions are interested in collecting about you.
Now, banks can add your depositor score to the mix. While the score probably isn’t too widespread right now, the fact of the matter is that financial institutions are always looking for ways to classify you, and use data about your behavior to figure out how to make money off you — or at least limit potential losses. You can ask your bank about the ways they might be profiling you. If you aren’t happy with the answer, it might be time to look for a new bank.