SolarCity CEO: Credit score requirement won't be cut for years

(Please note that the eighth paragraph contains language that some readers may find offensive)

Lyndon Rive, SolarCity co-founder and CEO, attends SolarCity's Inside Energy Summit in Manhattan, New York October 2, 2015. REUTERS/Rashid Umar Abbasi

(Reuters) - SolarCity Corp SCTY.O has no imminent plans to lower the credit score requirement for customers who lease their solar panel systems, and likely will not do so for a few years, its chief executive said on Thursday.

The comments from CEO Lyndon Rive followed a Nov. 11 news report in which he was quoted saying he wanted to lower the FICO score requirement for customers to below 650. The company’s stock fell 4 percent the day after the report.

FICO scores range from 300 to 850, and are a measure used by lenders to determine how likely a consumer is to repay a loan. FICO scores of 680 or higher are considered either good or excellent. Scores of 620 to 680 are considered “acceptable,” while scores of 550 to 620 are considered “subprime.”

“There is a massive market with 650 and above,” Rive said in an interview with Reuters. “There is no immediate plan to reduce the FICO score. It probably won’t happen in the next few years.”

The Bloomberg news report indicated that a drop in SolarCity’s FICO score requirement could come in less than a year.

SolarCity said last month that it would slow its growth targets next year to focus on cost cutting and becoming cash flow positive. But that does not mean the company wants to reduce its FICO requirements to fuel growth, Rive said.

“The idea that I want to reduce the FICO score because I’m desperate for demand is just a bunch of bullshit,” he said.

SolarCity’s FICO score requirement gradually dropped from 720 in 2008 to 650 in 2013.

“Will we eventually get to a point that the FICO score is reduced?” said Rive. “We have to get to that point at some point in the future if we want to get solar to everyone in the world.”

SolarCity shares have lost half their value since May as investors have fretted that tumbling oil and gas prices will reduce the allure of renewable energy and that the expiration of a key tax credit for solar energy next year will hamper the sector’s supercharged growth.

The stock was also weighed down by comments in August from hedge fund shortseller Jim Chanos of Kynikos Associates, who on CNBC called the solar company a “subprime financing company.”

This week SolarCity announced it will receive a $100 million investment from private equity firm Silver Lake. Rive and his first cousin, Tesla Motors Inc TSLA.O founder Elon Musk, will invest another $13 million.

SolarCity shares closed up 3.4 percent at $28.70 on Nasdaq on Thursday.

Reporting by Nichola Groom; Editing by Leslie Adler