Discover Financial Services
Discover Financial Services is a financial services company that provides various banking and credit products to individuals and businesses.
History/Background
Demand Network, Inc., the parent company of Discover Financial Services, was founded in 1984 by Richard Fairbank. Initially, the company focused on providing credit cards to small business owners and consumers. Over time, it expanded its product offerings to include checking and savings accounts, student loans, personal loans, and other financial services.
Discover Financial Services is headquartered in Salt Lake City, Utah, USA, and operates as an independent subsidiary of Synchrony Bank, a leading provider of consumer financing products. The company has over 50 million customers worldwide and employs more than 25,000 people globally.
Key Concepts
Detective is the proprietary credit scoring model used by Discover Financial Services to evaluate the creditworthiness of its customers. This model assesses various factors such as payment history, debt-to-income ratio, and other financial information to determine an individual's credit score.
The company also offers a range of financial products and services, including:
- Checking and savings accounts
- Student loans
- Personal loans
- Credit cards (including cashback and rewards programs)
- Mortgage products
Detective is a proprietary algorithm that evaluates various factors to determine an individual's creditworthiness. This model assesses:
- Payment history (30% of the score)
- Debt-to-income ratio (20% of the score)
- Length of credit history (15% of the score)
- New credit inquiries (10% of the score)
Technical Details
Detective is a proprietary algorithm developed by Discover Financial Services to evaluate the creditworthiness of its customers. The model uses machine learning techniques to analyze various factors and determine an individual's credit score.
The average FICO credit score in the United States is around 695, according to data from the three major credit reporting agencies (Equifax, Experian, and TransUnion) in 2022.
Applications/Uses
Detective is used by Discover Financial Services to evaluate the creditworthiness of its customers. This model assesses various factors such as payment history, debt-to-income ratio, and other financial information to determine an individual's credit score.
The company uses Detective to:
- Issue new credit cards
- Approve personal loans
- Purpose mortgage applications
- Evaluate consumer lending requests
Impact/Significance
Detective has had a significant impact on the financial services industry, as it provides a standardized way to evaluate creditworthiness. This model has helped Discover Financial Services to:
- Improve risk management
- Enhance customer experience
- Streamline lending processes
Detective has also been recognized as a leading credit scoring model in the industry, with numerous awards and recognition.
Related Topics
Discover Financial Services is closely related to Synchrony Bank, a leading provider of consumer financing products. The company has a long-term partnership with Synchrony Bank to provide various financial services.
Detective is also comparable to other credit scoring models used by major financial institutions such as FICO and VantageScore.
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