(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

FAIR ISAAC CORPORATION

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD FEBRUARY 6, 2006,

AND PROXY STATEMENT

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Please take notice that the Annual Meeting of the Stockholders of Fair Isaac Corporation will be held at the time and place and for the purposes indicated below.

December 30, 2005

Fair Isaac Corporation

901 Marquette Avenue, Suite 3200

Minneapolis, Minnesota 55402-3232

INFORMATION ABOUT THIS PROXY SOLICITATION AND VOTING PROCEDURES

Proxy Statement

      This Proxy Statement is furnished in connection with the solicitation by and on behalf of the Board of Directors of Fair Isaac Corporation (“Fair Isaac,” the “Company,” “we” or “us”), a Delaware corporation, of proxies to be voted at our 2006 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Monday, February 6, 2006, and at any postponement or adjournment thereof. A copy of our Annual Report to Stockholders for the fiscal year ended September 30, 2005, which includes a copy of our Annual Report on Form 10-K, accompanies this Proxy Statement. This Proxy Statement and the accompanying proxy card are being mailed to stockholders on or about December 30, 2005.

Voting of Shares Represented by Proxies on Items of Business

      The shares represented by the proxies received pursuant to this solicitation and not revoked will be voted at the Annual Meeting. A stockholder who has given a proxy may revoke it by giving written notice of revocation to our Office of the Secretary or by giving a duly executed proxy bearing a later date. Attendance in person at the Annual Meeting does not of itself revoke a proxy. However, any stockholder who attends the Annual Meeting may revoke a proxy previously submitted by voting in person. Subject to any such revocation, all shares represented by properly executed proxies will be voted in accordance with instructions on the proxy card. If no such specifications are made, proxies will be voted FOR the election of the eight nominees for director listed in this Proxy Statement, and FOR the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm (hereinafter “independent auditors” or “independent accountants”) for the fiscal year 2006.

Voting of Shares Represented by Proxies on Other Business

      The Board knows of no other matters to be presented for stockholder action at the Annual Meeting. If other matters are properly brought before the Annual Meeting, the persons named as proxies in the accompanying proxy card will have discretion with respect to how to vote the shares represented by them.

Proxy Solicitation

      We will bear the expense of preparing, printing, and mailing this Proxy Statement and the proxies solicited hereby, and we will reimburse banks, brokerage firms and nominees for their reasonable expenses in forwarding solicitation materials to beneficial owners of shares held of record by such banks, brokerage firms and nominees. In addition to the solicitation of proxies by mail, our officers and other employees may communicate with stockholders either in person or by telephone for the purpose of soliciting such proxies, and no additional compensation will be paid for such solicitation. We have retained Georgeson Shareholder Communications Inc. to assist in the solicitation of proxies, at a cost of $2,500, plus normal out-of-pocket expenses.

Outstanding Shares

      Only holders of our Common Stock at the close of business on December 9, 2005 (the “Record Date”), are entitled to receive this notice and to vote their shares at the Annual Meeting. At the close of business on the Record Date, there were 64,652,007 shares of Common Stock, $0.01 par value, issued and outstanding, and 24,204,776 shares of Common Stock were held as treasury stock by the Company. The shares held as treasury stock are not entitled to vote.

Voting Rights

      Each share of Common Stock is entitled to one vote for each matter to be voted on at the Annual Meeting, subject to the provisions regarding cumulative voting in the election of directors. As to the election of the directors, each stockholder is entitled to one vote per share, multiplied by the number of directors to be elected. The stockholder may cast all of such votes for a single candidate or may distribute them among two or more director candidates, as the stockholder sees fit. However, no stockholder may cumulate votes unless the name or names of the candidate or candidates for whom votes are cast have been placed in nomination prior to the voting and the stockholder has given notice at the meeting prior to the voting of the stockholder’s intention to cumulate votes. If any one stockholder has given such notice, all stockholders may cumulate their votes for candidates in nomination. The persons authorized to vote shares represented by executed proxies in the enclosed form (if authority to vote for the election of directors is not withheld) will have full discretion and authority to vote cumulatively and to allocate votes among any or all of our director nominees as they may determine, other than among those candidates for whom authority to vote has been withheld.

Votes Required

      A plurality of the votes cast is required for the election of each of the eight nominees for director listed in this Proxy Statement under Proposal 1. The affirmative vote of a majority of the shares present or represented by proxy and entitled to vote is necessary to ratify Proposal 2, the appointment of Deloitte & Touche LLP as our independent auditors for the fiscal year 2006. Abstentions will be counted toward a quorum and have the effect of negative votes with regard to Proposal 2. In the event that a broker indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular matter, such broker non-votes will also be counted towards a quorum and will have the same effect as negative votes with regard to Proposal 2. All votes will be tabulated by the inspector of elections appointed for the Annual Meeting, who will tabulate affirmative votes, negative votes, abstentions and broker non-votes.

Confidential Nature of Voting

      Any proxy, ballot or other voting material that identifies the particular vote of a stockholder and contains the stockholder’s request for confidential treatment will be kept confidential, except in the event of a contested proxy solicitation or as may be required by law. We may be informed whether or not a particular stockholder has voted and will have access to any comment written on a proxy, ballot or other material and to the identity of the commenting stockholder. The inspector of elections will be an independent third party not under our control.

INFORMATION ABOUT THE BOARD OF DIRECTORS, BOARD COMMITTEES AND CERTAIN

CORPORATE GOVERNANCE MATTERS

Board Meetings, Committees and Attendance

      During fiscal 2005, our Board of Directors met eight times. During fiscal 2005, the Board had three standing committees: the Audit Committee; the Compensation Committee; and the Governance, Nominating and Executive Committee. Each incumbent director attended more than 75% of the aggregate number of all Board meetings and meetings of committees on which the director served during fiscal 2005.

Availability of Certain Information Concerning Corporate Governance

      Each committee’s current charter, the criteria used to determine the independence of our directors and committee members, the Company’s Code of Business Conduct and Ethics and Code of Ethics for Senior Financial Management, and our Corporate Governance Guidelines are available free of charge on the Company’s website, www.fairisaac.com. This information is also available in print by writing to the Office of the Secretary at our corporate headquarters. The Company’s Amended and Restated Audit Committee Charter, which was amended and restated as of November 21, 2005, is attached hereto as Exhibit A.

      The Company is listed on the New York Stock Exchange (“NYSE”). As an NYSE-listed company, our Chief Executive Officer must certify annually that he is not aware of any violation by the Company of NYSE corporate governance listing standards as of the date of that certification. The Company’s unqualified Annual Written Affirmation and Chief Executive Officer’s certification for fiscal 2005 were filed with the NYSE February 17, 2005, and were reaffirmed thereafter in connection with other filings required by the NYSE.

Lead Independent Director

      Our Corporate Governance Guidelines provide that independent directors will meet in executive session at each regular Board meeting. The Chair of the Board presides at these meetings. A. George Battle, the Chair of the Board, is independent and presides at executive sessions held in accordance with our Corporate Governance Guidelines. The Company’s independent directors met four times in fiscal 2005 in executive session without the Chief Executive Officer or other management present.

Director Independence Criteria

      The Board of Directors has adopted criteria consistent with the NYSE listing requirements for use in determining whether its directors and director nominees are independent. The Board has determined that a majority of the Board as a whole is composed of “independent directors,” and each member of its standing committees is an “independent director” under these criteria. Thomas G. Grudnowski is the only current director who is not an “independent director” under NYSE listing requirements.

Attendance at Annual Meeting of Stockholders

      It is the policy of the Company, set forth in our Corporate Governance Guidelines, that directors should attend the Company’s annual meetings of stockholders, absent special circumstances. All persons nominated for election in 2005 as director and who were directors at the time of our 2005 Annual Meeting of Stockholders attended that meeting.

Policy for Stockholder and Other Interested Parties’ Communications with Board

      All interested parties, whether stockholders or otherwise, may send written communications to the Board of Directors or specified individual directors by addressing their communications to the Office of the Secretary, Fair Isaac Corporation, 901 Marquette Avenue, Suite 3200, Minneapolis, Minnesota 55402-3232. The communications will be collected by the Secretary and delivered, in the form received, to the presiding director or, if so addressed, to a specified director.

Audit Committee

      The Audit Committee is a separate committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The members of the Audit Committee are A. George Battle, Andrew Cecere, Guy R. Henshaw (Chair), and David S. P. Hopkins. The Audit Committee selects and retains independent auditors and assists the Board in its oversight of the integrity of the Company’s financial statements, including the performance of our independent auditors in their audit of our annual financial statements. The Audit Committee meets with management and the Company’s independent auditors as may be required. The independent auditors have full and free access to the Audit Committee without the presence of management. The Board has determined that Mr. Battle and Mr. Cecere are each an “audit committee financial expert” within the meaning of Item 401(h) of Regulation S-K under the Exchange Act, and that all Audit Committee members are “financially literate,” consistent with NYSE listing standards. The Audit Committee held eleven meetings during fiscal 2005.

Compensation Committee

      The members of the Compensation Committee are Tony J. Christianson, Alex W. Hart, and Margaret L. Taylor (Chair). The Compensation Committee determines all aspects of the compensation of our executive officers and considers and makes recommendations to the Board concerning action with respect to broadly

based compensation and benefits plans. The Committee also administers the Company’s 1992 Long-term Incentive Plan (“LTIP”), 2002 Stock Bonus Plan (“SBP”), and 2003 Employment Inducement Award Plan (“EIAP”). The Compensation Committee held seven meetings during fiscal 2005.

Governance, Nominating and Executive Committee

      The members of the Governance, Nominating and Executive Committee are A. George Battle (Chair), Guy R. Henshaw, and Margaret L. Taylor. This Committee may exercise certain powers of the full Board. It is also responsible for developing and recommending to the Board a set of corporate governance principles, identifying and considering appropriate candidates for election to the Board, and establishing the agenda for Board meetings. The Governance, Nominating and Executive Committee held six meetings during fiscal 2005.

      Evaluation of Director Candidates. In evaluating director candidates, the Committee will review all nominees for director regardless of the source of the nomination and will consider, in accordance with its charter, the composition of the Board as a whole, the requisite characteristics of each candidate, and the performance and continued tenure of incumbent Board members. The Committee has not established specific minimum qualifications in this regard. The Committee will recommend to the Board those nominees whose attributes it believes would be most beneficial to the Company. This assessment will include such considerations as independence, experience, integrity, competence, diversity, skills, and dedication in the context of the needs of the Board.

      Candidates Recommended by Stockholders. The Committee will consider director candidates recommended by stockholders in the same manner that it considers all director candidates. Stockholders who wish to suggest qualified candidates to the Committee should write to the Office of the Secretary, Fair Isaac Corporation, 901 Marquette Avenue, Suite 3200, Minneapolis, Minnesota 55402-3232, stating in detail the candidate’s qualifications for consideration by the Committee. If a stockholder wishes to nominate a director other than a person nominated by or on behalf of the Board, he or she must comply with certain procedures set out in the Company’s By-laws.

      Action on Director Candidates. Following consideration by the Governance, Nominating and Executive Committee, the full Board will review and act, or recommend action to the stockholders, as appropriate, with respect to director nominees. Invitation to join the Board will be extended by the Board, acting through its Chair, and by the Chief Executive Officer.

      Board, Committee and Director Performance. The Governance, Nominating and Executive Committee oversees the processes developed by each of the Board’s committees for the execution of its duties, and oversees and reports to the Board on an annual self-assessment of the performance of the Board, each standing committee of the Board, and each individual Director.

Director Compensation

      Each director who is not an employee of the Company (an “Outside Director”) receives a combination of cash and options to purchase Company stock. We periodically review our program of director compensation in view of our belief that director compensation should be competitive, and should link rewards to stockholder returns through increased ownership of our stock. During fiscal 2005, Outside Directors were compensated as described below.

      Cash Compensation. In fiscal 2005, each Outside Director other than the Chair received an annual retainer of $20,000, plus $1,000 for each Board or committee meeting attended. The Chair received an annual retainer of $40,000 for services as Chair, plus $2,000 for each Board and $1,000 for each committee meeting attended. Outside Directors who are chairs of standing committees at the time of the Annual Meeting of Stockholders received an additional $5,000 per year. Each Outside Director has the right, prior to the annual meeting, to elect to receive such annual retainer in the form of options to purchase our Common Stock instead of cash, on the same terms as the annual grants to Outside Directors, described below. A director who elects to receive his or her annual retainer in the form of a stock option receives a stock option to purchase a number of

shares equal to the amount of the retainer divided by one-half of the per share price of our Common Stock on the date of grant. In 2005, Ms. Taylor received an option to purchase 1,168 shares pursuant to such an election. If a director becomes a committee chair after the Annual Meeting of Stockholders, he or she receives, in lieu of any other compensation with respect to that position, $15,000, $10,000 or $5,000, if he or she assumes that position in the first through third, fourth through sixth, or seventh through ninth months, respectively, after the Annual Meeting of Stockholders for that year.

      Stock Compensation. Under our LTIP as amended, each Outside Director receives a grant of 30,000 non-qualified stock options (the “Initial Grant”) upon election as an Outside Director and a grant of 11,250 non-qualified options on the date of each Annual Meeting, provided such member has been an Outside Director since the prior Annual Meeting (the “Annual Grant”). In addition, each Outside Director who serves as a standing committee chairperson receives 1,500 non-qualified stock options (“Committee Chair Grant”). The exercise price of all such options is equal to the fair market value of our Common Stock on the date of grant. The Initial Grants vest in 20% increments on each of the first through fifth anniversary dates of the director’s election, and they are exercisable in full upon termination of the Outside Director’s services for any reason. Annual Grants and Committee Chair Grants are immediately exercisable upon grant. All option grants to Outside Directors expire ten years after the date of grant.

PROPOSAL 1

ELECTION OF DIRECTORS

Directors and Nominees

      Our Board of Directors currently consists of eight members. Our Board of Directors has nominated eight persons for election as directors to serve until the 2007 Annual Meeting of Stockholders and thereafter until their respective successors are duly elected and qualified. Dr. David S.P. Hopkins will not stand for re-election at the expiration of his term as a director on February 6, 2006. All other persons listed below are nominees, and except for Mr. Lansing, are standing for re-election as a director of the Company. Mr. Lansing was recommended by non-management directors, approved by the Governance, Nominating and Executive Committee, and was nominated by the Board of Directors on November 21, 2005, to fill the vacancy that will be created by Dr. Hopkins’ departure. If any nominee is unable or declines to serve (a contingency which we do not now foresee), either the proxies named in the accompanying form will vote the shares represented by them for any nominee who may be nominated by the present Board of Directors to fill such vacancy, or the size of the Board will be reduced accordingly.

A. George Battle. Director since August 1996 and Chair of the Board of Directors since February 2002; member of the Audit Committee; Chair of the Governance, Nominating and Executive Committee; age 61.

Andrew Cecere. Director since April 2004; member of the Audit Committee; age 45.

Tony J. Christianson. Director since November 1999; member of the Compensation Committee; age 53.

Thomas G. Grudnowski. Director since December 1999; President and Chief Executive Officer; age 55.

Alex W. Hart. Director since August 2002; member of the Compensation Committee; age 65.

Guy R. Henshaw. Director since February 1994; Chair of the Audit Committee; member of the Governance, Nominating and Executive Committee; age 59.

David S. P. Hopkins. Director since August 1994; member of the Audit Committee; age 62.

Margaret L. Taylor. Director since December 1999; Chair of the Compensation Committee; member of the Governance, Nominating and Executive Committee; age 54.

William J. Lansing. Nominee for election; age 47.

      Officers are elected at the first meeting of the Board of Directors following the Annual Meeting of Stockholders. Officers serve until their successors are elected and qualified. There are no family relationships between any of the directors and any executive officer.

Vote Required

      A plurality of the votes cast is required for the election of each director.

Recommendation of the Board of Directors

      THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES LISTED ABOVE.

PROPOSAL 2

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

      It is the responsibility of the Audit Committee to select and retain independent auditors for the fiscal year ending September 30, 2006. The Audit Committee has appointed the firm of Deloitte & Touche LLP (“Deloitte & Touche”) as our independent auditors for the Company’s fiscal year 2006. Although stockholder ratification of the Audit Committee’s selection of independent auditors is not required by our By-laws or otherwise, we are submitting the selection of Deloitte & Touche to stockholder ratification so that our stockholders may participate in this important corporate decision. If not ratified, the Audit Committee will reconsider the selection, although the Audit Committee will not be required to select different independent auditors for the Company.

      Representatives of Deloitte & Touche will be present at the Annual Meeting and will have an opportunity to make a statement and respond to questions from stockholders present at the meeting.

      KPMG LLP (“KPMG”) served as our independent accountants from May 1991 through our 2004 fiscal year. On November 14, 2004, our Audit Committee dismissed KPMG as the Company’s independent accountants and appointed Deloitte & Touche as the Company’s new independent accountants. KPMG continued as the Company’s independent accountants through the completion of its audit of the Company’s consolidated financial statements as of and for the year ended September 30, 2004. This action effectively dismissed KPMG as the Company’s independent accountants for the fiscal year that commenced on October 1, 2004.

      The report of KPMG on the Company’s consolidated financial statements for the fiscal year ended September 30, 2004, did not contain any adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope, or accounting principles, except that such report made reference to the Company’s change in its method of accounting for goodwill.

      In connection with its audits of the Company’s consolidated financial statements for the fiscal year ended September 30, 2004, and through the date of KPMG’s dismissal, there were no disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of KPMG, would have caused it to make reference thereto in its report on the Company’s consolidated financial statements as of and for the fiscal year ended September 30, 2004. None of the reportable events described in Item 304(a)(1)(v) of Regulation S-K occurred during the fiscal year ended September 30, 2004, and through the date of KPMG’s dismissal.

      During the fiscal year ended September 30, 2004, and through the date of Deloitte & Touche’s appointment, the Company did not consult with Deloitte & Touche regarding any of the matters or events set forth in Items 304(a)(2)(i) and (ii) of Regulation S-K.

      The Company has provided a copy of the above disclosures to KPMG and Deloitte & Touche, each of which has concurred with the substance thereof, as it relates to each of them, and within the scope of the knowledge and belief of each.

Audit and Non-Audit Fees

      The following table presents fees for professional audit services rendered by the Company’s independent auditors, Deloitte & Touche, for the fiscal year ended September 30, 2005, and KPMG for the fiscal year

ended September 30, 2004, for the audit of the Company’s annual financial statements and fees for other services rendered by each of those firms during those respective periods.

      Audit Fees. Audit fees consisted of fees for services rendered in connection with the annual audit of the Company’s consolidated financial statements, quarterly reviews of financial statements included in the Company’s quarterly reports on Form 10-Q, fees for Securities and Exchange Commission (“SEC”) registration statement services, and fees for comfort letter procedures.

      Audit Related Fees. Audit related fees consisted principally of fees for audits of financial statements of employee benefit plans and fees related to operational system attestation services.

      Tax Fees. Tax services consisted of fees for tax consultation and tax compliance services.

      The Audit Committee considers whether the provision of services other than for audit fees is compatible with maintaining our independent auditor’s independence, and has determined these services for fiscal 2005 and 2004 were compatible. None of the services described above were approved by the Audit Committee pursuant to the exception provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X under the Exchange Act.

Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Auditors

      The Audit Committee is responsible for appointing, setting compensation, and overseeing the work of the independent auditors. The Audit Committee has established a policy regarding pre-approval of all audit and permitted non-audit services provided by the independent auditors.

      On an ongoing basis, management communicates specific projects and categories of service for which the advance approval of the Audit Committee is requested. The Audit Committee reviews these requests and advises management if the Audit Committee approves the engagement of the independent auditors. On a periodic basis, management reports to the Audit Committee regarding the actual spending for such projects and services compared to the approved amounts. The Audit Committee may also delegate the ability to pre-approve audit and permitted non-audit services to a subcommittee consisting of one or more members, provided that any such pre-approvals are reported on at the next Audit Committee meeting.

Vote Required

      The affirmative vote of a majority of the shares present and entitled to vote is required to ratify this proposal.

Recommendation of the Board of Directors

      THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2006.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth certain information regarding the beneficial ownership of our Common Stock as of December 9, 2005 (except as otherwise noted), by (a) each of our directors and nominees for director, (b) each of the executive officers named in the Summary Compensation Table below, (c) all of our

executive officers and directors as a group, and (d) each person known to us who beneficially owns more than 5% of the outstanding shares of our Common Stock.

EXECUTIVE COMPENSATION

Compensation

      The following table sets forth the cash and non-cash compensation awarded to, earned by, or paid to (a) the Chief Executive Officer, and (b) each of our other four most highly compensated executive officers at the end of the Company’s 2005 fiscal year. The information is presented for services rendered in all capacities to the Company and its subsidiaries during the fiscal year ended September 30, 2005.

Summary Compensation Table

      The following table sets forth certain information concerning options to purchase Company stock granted during fiscal 2005 to the persons named in the “Summary Compensation Table.”

Option Grants in Last Fiscal Year

      The following table sets forth certain information concerning the exercise, availability and value of options to purchase Company stock granted during fiscal 2005 to the persons named in the “Summary Compensation Table.”

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

      The following table provides certain information as of September 30, 2005, with respect to our equity compensation plans:

Equity Compensation Plan Information

Executive Officer Employment Agreements — Thomas G. Grudnowski

      Mr. Thomas G. Grudnowski has served as the Company’s Chief Executive Officer and as a director since December 2, 1999.

      On January 30, 2004, we entered into a new employment agreement (the “Grudnowski Employment Agreement”) with Mr. Grudnowski. The Grudnowski Employment Agreement replaced an earlier employment agreement, which had expired by its terms. The material provisions of the Grudnowski Employment Agreement are summarized below.

Executive Officer Change-in-Control Arrangements

      Each of Messrs. Grudnowski, Chiappetta, Osborne and Rosenberger is, or was during the period of their fiscal 2005 employment by us, a party to a Management Agreement with the Company. Subject to certain provisions in these agreements, each officer who is a party to a Management Agreement is eligible for the following benefits, among others, if such officer’s employment is terminated or the officer’s responsibilities or compensation are materially diminished within one year following the occurrence of specified events generally involving a change in control of the Company: (a) a payment equal to such officer’s annual base compensation then in effect, plus an amount equal to such officer’s bonus or cash incentive payment for the fiscal year preceding the change in control; (b) the immediate vesting of all stock options and satisfaction of the restrictions on any restricted stock held; and (c) the right to continue to participate in any health, disability and life insurance plan or other program then in effect. Change-in-control events potentially triggering benefits under the Management Agreements would occur if any person acquires 30% or more of our outstanding

Common Stock, and the current directors and those elected directors under normal circumstances cease to be a majority of the Board, or if a merger or other business combination occurs and our stockholders receive less than 70% of the resulting equity. Mr. Grudnowski’s eligibility to receive salary and benefits payments under his Management Agreement may be affected by his receipt of similar payments under the Grudnowski Employment Agreement, as described above.

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

      This Audit Committee is composed of four directors, each of whom has been determined by the Board to be an “independent director” under the Company’s guidelines and the New York Stock Exchange listing requirements. The members of the Audit Committee are A. George Battle, Andrew Cecere, Guy R. Henshaw and David S. P. Hopkins. The Board has determined that Mr. Battle and Mr. Cecere are each an “audit committee financial expert” within the meaning of Item 401(h) of Regulation S-K under the Exchange Act, and that all Audit Committee members are “financially literate” consistent with NYSE listing standards. The Audit Committee selects and retains an independent registered public accounting firm as the Company’s independent auditor, and assists the Board in overseeing (1) the integrity of the Company’s financial statements, (2) the independent auditor’s qualifications and independence, (3) the performance of the Company’s internal audit function and independent auditor and (4) the compliance by the Company with legal and regulatory requirements. The Audit Committee meets with management and the independent auditor as may be required. The independent auditor has full and free access to the Audit Committee without the presence of management. The Board of Directors has adopted a written charter for the Audit Committee that addresses the responsibilities of the Audit Committee. This charter, as amended and restated effective November 21, 2005, is attached as Exhibit A to this Proxy Statement. This report relates to the activities undertaken by the Audit Committee in fulfilling these responsibilities.

      The Audit Committee members are not professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management or the independent auditor. In performing its functions, the Audit Committee acts only in an oversight capacity and necessarily relies on the work and assurances of the Company’s management, which has the primary responsibility for financial statements and reports, and of the independent auditor, who, in its report, expresses an opinion on the conformity of the Company’s annual financial statements to accounting principles generally accepted in the United States of America.

      On November 14, 2004, the Audit Committee approved the dismissal of KPMG LLP and appointed Deloitte & Touche LLP (“Deloitte & Touche”) as the Company’s independent auditor for fiscal 2005. In fiscal 2005, the Audit Committee met and held discussions with management and Deloitte & Touche on numerous occasions. In fulfilling its oversight responsibilities, the Audit Committee reviewed with management and the independent auditor the Company’s quarterly consolidated financial statements prior to the filing of each Quarterly Report on Form 10-Q and the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2005. This review included a discussion of the Company’s accounting principles, the reasonableness of significant estimates and judgments, and the disclosures in the Company’s financial statements, including the disclosures relating to critical accounting policies. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. The Audit Committee discussed with Deloitte & Touche matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees).

      Deloitte & Touche also provided to the Audit Committee the written disclosures required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Audit Committee discussed with Deloitte & Touche the firm’s independence.

      During fiscal 2005, the Audit Committee reviewed all audit and non-audit services performed for the Company by Deloitte & Touche and considered whether Deloitte & Touche’s provision of non-audit services was compatible with maintaining its independence from the Company. The Audit Committee also received reports from management regarding the Company’s policies, processes and procedures regarding compliance

with applicable laws and regulations and the Company’s Code of Business Conduct and Ethics. In connection with these reports, the Audit Committee consulted with legal counsel regarding the corporate governance environment and considered additional procedures or matters that should be undertaken or assumed by the Audit Committee.

      During fiscal 2005, management documented, tested and evaluated the Company’s system of internal controls over financial reporting in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act of 2002 and the SEC regulations adopted thereunder. The Audit Committee met with representatives of management, the internal auditors, legal counsel and the independent auditor on a regular basis throughout the fiscal year to discuss the progress of this process. At the conclusion of this process, the Audit Committee received from management its assessment and report on the effectiveness of the Company’s internal controls over financial reporting. In addition, the Audit Committee received from Deloitte & Touche its attestation report on management’s assessment and report on the Company’s internal controls over financial reporting. The Audit Committee reviewed and discussed the results of management’s assessment and Deloitte & Touche’s attestation.

      Based upon the Audit Committee’s discussions with management and the independent auditor, and the Audit Committee’s review of the representations of management and the report of the independent auditor to the Audit Committee, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2005, as filed with the SEC.

      Submitted by the Audit Committee of the Board of Directors.

A. George Battle

Andrew Cecere

Guy R. Henshaw (Chair)

David S. P. Hopkins

COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

REPORT ON EXECUTIVE COMPENSATION

      The Compensation Committee is composed entirely of non-employee directors, each of whom has been determined by the Board to be an “independent director” under the Company’s criteria for determining director independence and the New York Stock Exchange listing requirements. The Compensation Committee determines all aspects of the compensation of our executive officers and considers and makes recommendations to the Board concerning action with respect to broadly based compensation and benefits plans. The Compensation Committee also administers the Company’s 1992 Long-term Incentive Plan (“LTIP”), its 2003 Employment Inducement Award Plan (“EIAP”), its 2002 Stock Bonus Plan (“SBP”), and a number of stock-based compensation plans assumed by the Company pursuant to acquisitions. The Compensation Committee operates under a charter, which is available on the Company’s web site.

      Our executive compensation program is designed to be market competitive while meeting the primary goals of attracting and retaining well-qualified individuals. Significant portions of executive compensation are tied to achieving targets for revenue growth and operating margin, and to aligning our executives’ interests with those of our stockholders through the use of stock-based compensation. The Compensation Committee retains the services of a qualified executive compensation consulting firm in connection with its work.

      In fiscal 2005, our executive compensation program consisted of three core components: annual base salary, participation in our cash incentive bonus plan, and the opportunity to receive equity awards under the Company’s stock-based compensation plans.

      Executive officers were eligible to participate in the same health and welfare benefits plans as our general employee population. These include group health and life insurance, participation in the employee stock purchase and 401(k) plans, and the potential for a profit sharing contribution to the 401(k) accounts made at the discretion of the Board of Directors. Executive officers were also eligible to participate in a Supplemental

Retirement and Savings Plan, pursuant to which participants may annually defer up to 25% of their base pay and up to 75% of their incentive pay and bonuses on a pre-tax basis until retirement or disability. Deferred amounts are credited with earnings based on specified benchmark funds.

Annual Base Salary

      The Compensation Committee determines the annual base salary of each of our executive officers, including the Chief Executive Officer, subject to the provisions of any employment agreements, which also must be approved by the Compensation Committee. Salaries are adjusted annually by considering the officer’s duties and responsibilities, the officer’s demonstrated ability to impact the Company’s operations and profitability, the officer’s experience and past individual performance, operational and strategic Company performance, competitive market practices and internal equity factors.

Incentive Bonus Plans

      Substantially all of the Company’s employees participate in incentive plans based on the Company’s performance against established incentive plan goals for revenue growth and operating margin set by the Board of Directors at the commencement of each fiscal year. For fiscal 2005, three such plans were approved by the Board of Directors: the Broad-Based Incentive Plan, for non-executive employees (“BBIP”); the Sales Incentive Plan, for sales employees (“SIP”); and the Management Incentive Plan, for vice presidents and certain other senior leaders (“MIP”) (collectively, the “Incentive Plans”). The Incentive Plans were amended as of April 1, 2005, to provide greater flexibility to the Company in the timing, calculation and payment of cash bonus awards accrued during any given fiscal year, although the performance goals remained unchanged. The BBIP and MIP provided for quarterly payouts, with a pool of funds available for distribution based upon the Company’s performance against pre-established goals, and the payout range assigned to individual participants in each plan based upon the participant’s scope of responsibility. The midpoint of a participant’s payout range represented his or her targeted payout level, with this value increasing commensurate with his or her level of responsibility. The Compensation Committee sets the incentive compensation payout range for each of the executive officers. The SIP provided for payouts based upon the achievement of individually assigned goals established by Company management at the beginning of the fiscal year. Employees with roles involving the direct generation of new business had goals with specific financial quotas and targeted incentive earnings, and monthly incentive awards were tied to the generation of new business. Employees with roles involving primarily pre-sales or other support activities had goals focused on the achievement of key milestones and were eligible for quarterly awards.

      During fiscal 2005, the MIP involved two performance factors: a quarterly evaluation of the Company’s actual performance in relation to revenue growth and operating margin goals previously established by the Board of Directors; and the Committee’s semi-annual assessment of individual participant performance. Company performance against established incentive plan goals determined the size of the overall incentive pool available for payout each quarterly cycle, while individual participant performance determined the point in each participant’s payout range used for incentive calculation.

      Because Company performance was below targeted levels in the first and second quarters of fiscal 2005, no incentive bonus plan awards were paid under the BBIP and MIP for that period to any Company employee, consistent with the Compensation Committee’s philosophy of maximizing the alignment between management’s compensation and growth in stockholder value. In the third and fourth quarters of fiscal 2005, the Company’s performance supported the payment of incentive bonus payments for both quarters. Payments to all participants in the BBIP and MIP were $3.0 million in each of these two quarters, or $6.0 million in total.

Stock-Based Compensation Plans

      The Compensation Committee administers the LTIP, the EIAP, the SBP, and certain other stock-based compensation plans assumed through acquisitions as described below. The primary purpose of these plans is to align the interests of the Company’s workforce, including management, with the interests of its stockholders.

Individual awards under all of these plans are granted based on assigned level of responsibility and individual performance.

      The LTIP is the principle vehicle by which stock-based compensation is awarded to our employees and executive officers. Awards under the LTIP are made to prospective employees to induce them to accept employment with the Company, and to existing employees to recognize individual contributions and to foster retention. Grants under the LTIP, including grants to senior executives, are designed to meet these objectives. The options awarded under the LTIP to Messrs. Grudnowski, Brebach, Chiappetta, Osborne and Rosenberger in fiscal 2005 are reflected in this Proxy Statement, in the table captioned “Option Grants in Last Fiscal Year.”

      The EIAP was adopted in November 2003 following a detailed analysis of our anticipated acquisition-driven growth and a determination that existing equity plans would provide an insufficient number of options to effectively support this growth. The EIAP was initially used to grant options to new hires below the executive officer level, outside the acquisition context. In May 2004, the Compensation Committee determined to use the plan solely for acquisition-related grant activity. Under both the LTIP and the EIAP, the Compensation Committee may award our executive officers options to purchase our Common Stock or shares of restricted stock. The exercise price for all options granted under these plans must be at least equal to the fair market value of the shares on the date of grant. Grants under both plans typically vest over an extended period of time, consistent with the Compensation Committee’s desire to foster retention. On November 15, 2004, the Compensation Committee approved the grant of 575,000 stock options under the EIAP to employees who joined the Company in connection with the Company’s acquisition of Braun Consulting, Inc. (“Braun”). In connection with the Braun acquisition, the Compensation Committee also approved, effective as of November 15, 2004, an award under the EIAP of 25,000 shares of restricted stock to Steve Braun, a former executive officer of the Company. All grants in connection with the Braun Acquisition are subject to vesting in four equal, annual installments, except the shares and options awarded to Mr. Braun which were subject to vesting in 50% increments on November 10, 2006, and November 10, 2008. The options granted to Mr. Braun were forfeited without being exercised and his restricted stock was forfeited following the termination of his employment.

      The SBP was adopted to provide stock-driven incentives to key employees to motivate and reward the successful completion of the acquisition of HNC Software, Inc. (“HNC”) and integration of the HNC business. Under this plan, the Compensation Committee may award stock to key employees, subject to terms and conditions, including vesting requirements and price, specified by the Compensation Committee at the time of the award and memorialized in a written agreement between the Company and the recipient. After the initial 2002 awards under the SBP, no further shares were available for award under this plan, and new shares would only be available to the extent that the initial awards were forfeited before the restrictions lapsed. In 2003, 2004 and 2005, no awards of restricted stock were made under this plan.

      In certain cases where we accomplished acquisitions by purchasing the stock of the acquired entity, some of our senior executives who were employees of these companies hold options originally granted under plans of the predecessor entity.

      The Compensation Committee determined that certain terms of the LTIP and the EIAP, as well as the HNC Software, Inc. 2001 Equity Incentive Plan which the Company had assumed in the HNC acquisition, were not desirable. On May 10, 2005, the Compensation Committee elected to amend these plans to remove loan provisions which had provided for the possibility of loans to plan participants for the purpose of acquiring shares.

Limits on Tax-Deductible Compensation

      Section 162(m) of the Internal Revenue Code of 1986, as amended, places a limit of $1 million on the amount of compensation that we may deduct in any year with respect to our Chief Executive Officer and four highest paid executives employed at the last day of the fiscal year. However, performance-based compensation that has been approved by stockholders is excluded from the $1 million limit. The Company has not adopted any formal policy with respect to Section 162(m), although the Compensation Committee generally

structures compensation to be deductible and considers the cost and value to the Company in making compensation decisions that could result in non-deductibility. The Compensation Committee has on occasion made decisions that have resulted or may result in non-deductible compensation. The Compensation Committee believes that these decisions were appropriate and in the best interests of the Company.

CEO Compensation

      A new employment agreement was entered into with Thomas G. Grudnowski on January 30, 2004, (the “Grudnowski Employment Agreement”) in connection with the continued employment of Mr. Grudnowski as the Company’s Chief Executive Officer. The underlying philosophy of this agreement is consistent with the philosophy generally applicable to all of the Company’s executive officers, as described above in this report. A more detailed description of the terms of the Grudnowski Employment Agreement is contained elsewhere in this Proxy Statement under the heading “Executive Officer Employment Agreements — Thomas G. Grudnowski.”

      On each of October 20, 2004, and October 20, 2005, as part of Mr. Grudnowski’s annual performance reviews, additional options to purchase 150,000 shares and 200,000 shares, respectively, of Common Stock were granted under the LTIP to Mr. Grudnowski based on the formula set out in the Grudnowski Employment Agreement. All of Mr. Grudnowski’s options under the Grudnowski Employment Agreement vest in three equal installments on each of the first three anniversaries of the date of the grant, and expire if unexercised by April 30, 2011.

      The Compensation Committee took action on December 20, 2005, to determine Mr. Grudnowski’s incentive bonus for fiscal 2005 under the criteria established by the Committee as contemplated by the Grudnowski Employment Agreement. The Compensation Committee awarded Mr. Grudnowski an annual bonus of $850,000 for fiscal 2005. The Compensation Committee based this bonus award on the Company’s strong financial performance, including net income, earnings per share (“EPS”) and revenue components over fiscal 2004, and Mr. Grudnowski’s achievement of established strategic goals, including the expansion of the organization’s executive leadership and the development of growth opportunities in new vertical markets.

      On December 20, 2005, the Compensation Committee also increased Mr. Grudnowski’s annual base salary by 5.6% to $660,000 with an effective date of November 19, 2005. The increase was made in conjunction with the Compensation Committee’s annual base salary review and adjustment process for Mr. Grudnowski as contemplated by the Grudnowski Employment Agreement, and the effective date determination is consistent with that used for other Company employees as part of the Company’s annual performance review process.

Tony C. Christianson

Alex W. Hart

Margaret L. Taylor (Chair)

Compensation Committee Interlocks and Insider Participation

      Tony C. Christianson, Alex W. Hart, and Margaret L. Taylor served as the members of our Compensation Committee for the fiscal year ended September 30, 2005. Mr. Philip G. Heasley also served as a member of this committee from the start of our fiscal year though April 22, 2005, on which date he resigned from the Board. Messrs. Christianson, Hart and Heasley and Ms. Taylor are and were non-employee directors. None of our executive officers served as a director or as a member of a compensation committee of any business entity employing any of our directors during the fiscal year ended September 30, 2005.

PERFORMANCE GRAPH

      The following graph shows the total stockholder return of an investment of $100 in cash on September 30, 2000, in (a) the Company’s Common Stock, (b) the Research Data Group, Inc. Indices for the Standard & Poors’ 500 Stocks (U.S. Companies), and (c) the Standard & Poors’ 500 Application Software Index, in each case with reinvestment of dividends. These indices relate only to stock prices and do not purport to afford direct comparison of the business or financial performance of the companies. We do not believe there are any publicly traded companies that compete with us across the full spectrum of our product and service offerings.

COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN

Among Fair Isaac Corporation,

the S&P 500 Index, and the S&P Application Software Index

INDEXED RETURNS

Total Return to Shareholders

(Includes reinvestment of dividends)

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 16(a) of the Exchange Act, and the rules of the SEC thereunder, require our directors, executive officers, and persons who own more than 10% of our Common Stock to file reports of their ownership and changes in ownership of our Common Stock with the SEC. Our employees generally prepare these reports on the basis of information obtained from each director and officer. Based on information available to us, we believe that all reports required by Section 16(a) of the Exchange Act to be filed by its directors, executive officers, and greater than 10% owners during the last fiscal year were filed on time.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      One of Mr. Grudnowski’s children is employed as an attorney in the Company’s legal department and was paid total compensation in excess of $60,000 in fiscal 2005. This compensation is consistent with the Company’s compensation policies, and the Company believes that it is also consistent with prevailing market rates for comparable positions.

SUBMISSION OF PROPOSALS OF STOCKHOLDERS

      Under the rules of the SEC, if a stockholder wants us to include a proposal in our proxy statement and proxy card for our 2007 Annual Meeting of Stockholders, the proposal must be received at our Office of the Secretary, 901 Marquette Avenue, Suite 3200, Minneapolis, Minnesota 55402-3232, no later than 5:00 p.m. local time on September 8, 2006, to be considered for inclusion in the proxy statement and proxy card for that meeting. Stockholder communications to the Board, including any such communications relating to director nominees, may also be addressed to the Office of the Secretary at that address. The Board believes that no more detailed process for these communications is appropriate, due to the variety in form, content and timing of these communications. The Secretary will forward the substance of meaningful stockholder communications, including those relating to director candidates, to the Board or the appropriate committee upon receipt.

      In order for business, other than a stockholder proposal included in our proxy statement and proxy card, to be properly brought before the 2007 Annual Meeting by a stockholder, the stockholder must give timely written notice thereof to the Office of the Secretary and must otherwise comply with our By-laws. Our By-laws provide that, to be timely, a stockholder’s notice must be received by our Corporate Secretary at our principal executive offices not fewer than 60 days nor more than 90 days prior to the scheduled date of the annual meeting. If the Company gives fewer than 70 days’ notice or prior public disclosure of the scheduled meeting date, then, to be timely, the stockholder’s notice must be received no later than the earlier of (a) the close of business on the tenth day following the day on which such notice was mailed or such disclosure was made, whichever occurs first, and (b) two days prior to the scheduled meeting date.

Dated: December 30, 2005

EXHIBIT A

FAIR ISAAC CORPORATION

AUDIT COMMITTEE CHARTER

Amended and Restated as of November 21, 2005

Purpose

The Audit Committee (the “Committee”) is appointed by the Board to oversee and assist the Board in overseeing (1) the integrity of the financial statements of Fair Isaac Corporation (the “Company”), (2) the independent auditor’s qualifications and independence, (3) the performance of the Company’s internal audit function and independent auditor, and (4) the compliance by the Company with legal and regulatory requirements.

Committee Membership

The Audit Committee shall consist of no fewer than three members. The members of the Committee shall meet the independence requirements of the New York Stock Exchange and shall be financially literate, each as determined by the Board. At least one member of the Committee shall be an “audit committee financial expert,” as determined by the Board in accordance with Securities and Exchange Commission (“Commission”) rules.

The members of the Committee shall be appointed by the Board on the recommendation of the Governance, Nominating and Executive Committee. Audit Committee members may be replaced by the Board.

Committee Processes

The Audit Committee shall be presided over by a Chair selected by the Board or, in the absence of such selection, by the Committee’s members. The Chair, in consultation with the members of the Audit Committee, will determine the frequency and length of the Committee’s meetings and develop the Committee’s agenda.

The Audit Committee shall meet as often as it determines necessary or appropriate, but not less frequently than quarterly. The Audit Committee shall meet in executive session at least quarterly and shall meet periodically with management, the internal auditors, the independent auditor, and the General Counsel in separate executive sessions. The Audit Committee may form and delegate authority to subcommittees consisting of one or more members as appropriate.

The Audit Committee shall have the authority, to the extent it deems necessary or appropriate, to retain outside legal, accounting or other advisors. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing an audit report and to any advisors employed by the Audit Committee.

The Audit Committee shall make regular reports to the Board. The Audit Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. The Audit Committee shall annually review the Audit Committee’s own performance.

Committee Authority and Responsibilities

Among its duties and responsibilities, the Audit Committee shall:

     Financial Statement and Disclosure Matters

     Oversight of the Company’s Relationship with the Independent Auditor

     Oversight of the Company’s Internal Audit Function

     Compliance Oversight Responsibilities

Limitation of Audit Committee’s Role

While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable legal and other requirements. These are the responsibilities of management and the independent auditor. The Audit Committee is entitled to rely on the information provided by the Company’s management and the advice of professional experts and counselors.