The Newest FICO Score Isn't a Credit Score

By now, you probably (understandably) associate FICO with your credit history, so it may surprise you to hear the company is launching a new score that rates something else entirely: your driving habits.

You can breathe a sigh of relief though – unlike your credit scores, which are based on information on your credit reports that lenders can automatically provide to the credit bureaus once you get a loan, FICO’s driving score will only monitor your driving habits if you or the business you are working for opt to use its latest analytics.

How the Score Works

FICO is partnering with the online driving training company eDriving to capture acceleration, braking, cornering, speeding, cellphone distraction and other behavioral data on users via a program that gets downloaded onto smartphones.

“It turns your phone into a black box,” said eDriving spokeswoman Regina Lewis during a phone interview.

The program is designed to give people a way to improve their driving scores through feedback and coaching, said FICO spokeswoman Rachel Bell. Once you download the program, called Mentor, your score will be available after each trip in order to provide immediate feedback, and to build weekly and monthly scores. This feedback will indicate areas of driving that need improvement and will provide tutoring to help each driver improve their score based on his or her risk profile, according to Celia Stokes, CEO of eDriving.

“It’s more like a full Weight Watchers program than just a scale,” said Stokes. “We’re not going to be teaching new things, like it’s bad to tailgate or be on the phone while driving. Drivers already know those things. But 80% of people still use the phone while driving because they’re addicted to the behavior.”

Mentor gets smarter over time, and will keep acquiring data points to become a legitimate source for insurance companies, Lewis said. The hope is that business fleets and consumers will eventually be able to show their stellar scores to the companies for significantly lower rates.

“If you’re a good driver, you’ll be able to prove it,” said Lewis.

The program will be available for business fleets sometime within the next 90 days and to consumers sometime within the first quarter of 2017, said Lewis. Businesses will be able to monitor whether their drivers are driving safely, she said, and parents will eventually be able to track and coach their teen’s driving habits. The goal is for the score to become an industry standard, said Bell.

Users can choose whether to share the score and information with their insurance companies.

What Will Be Most Damaging to the Score?

In the same way that your credit score gets dinged by bad financial behavior such as late bill payments and high debt, your driving score will get dinged by bad driving habits that could lead to an accident. (If you’re curious about where your traditional credit stands, you can check two of your scores, updated every 30 days on Credit.com for free.)

The things that will ding your score the hardest will be your cellphone use while driving (including whether you touch your phone, text, Snapchat, or even use Bluetooth.) Speeding, hard-braking, whether you take hairpin turns, and have a heavy foot on the gas pedal will also be hard on your score.

Shamification

The program will also provide a “gamification or shamification” rating, said Stokes, showing how you compare to other drivers in your company, family or neighborhood.

“It’s one thing to say, well everyone texts sometime. It’s another thing to know that you’re in the bottom 10% of your company, neighborhood or family,” said Stokes.

Interestingly, “engagement,” or whether you check your score and allow yourself to be coached by program’s feedback will also be tracked and used in your assessment, said Stokes.

You’ll be able to improve your score with each trip. The context of where you’re driving and ZIP code comparisons will all come into play, said Stokes. FICO will determine how much each factor is weighted, and Bell said the company has been working with eDriving and researching each bad factor’s effect on driving “for years.” Companies will also be able to tether scores to an employee’s past driving record for drivers who sign off on the monitoring.

“We can actually refine the score based on the likelihood that someone will get into an accident or have an infraction on their license,” said Stokes. “The point of all of this is to reduce the likelihood that someone gets into a collision.”

Companies have already expressed interest in using the score.

“We’re building an advisory board and we’ve had tremendous interest from insurance companies and companies with large global fleets,” Stokes said.

Consumers, however, may be a harder get: According to a January 2016 survey by the Pew Research Center, 45% of respondents said they would find it unacceptable to agree to let an insurance company put a device in their car to monitor their driving habits in exchange for discounts.

For those who think this might just be too much Big Brother activity, Bell said, “the goal of the score is to help the driver because it gives immediate feedback on your driving behavior to ultimately benefit you. Safer drivers have less wear and tear on their cars, and are less likely to be in an incident. And ultimately, a safer driver will have lower insurance rates.”

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