For the past 27 years, FICO Credit Scores have been the
bedrock of most consumer- lending decisions in the US.
These scores were based mostly on consumers’ history of
paying mortgages, credit card balances and loans. The FICO
model has been periodically updated to help lenders to be
more informed about credit-granting decisions and help the
consumer get access to the credit they need. The most widely
used version is FICO Score 8.
The latest update is that Fair Isaac Corp. (the company
behind FICO) has decided to test out a new type of scores
called UltraFICO with credit reporting agency Experian and
a technology company called Finicity. This will be unveiled
early next year (2019) and will consider the borrowers’ bank-
account balance and cash-management behavior in addition
to the traditional credit.
The move to test the new scoring system comes in the wake
of some financial companies who are supplementing
traditional credit scores with an analysis of customer’s bank
account to assess consumer’s creditworthiness.
Here are a few key features as to how it works and who could
benefit from the new UltraFICO scoring system.
- The new FICO score will be optional and will be offered
only to consumers who opt for it. They will be given the
choice to do so when they do not qualify by the more
traditional systems. However, they should also agree to
share with the lender personal information, and allow
them to access their banking and saving data to evaluate
overall financial responsibility.
- This new system will potentially improve the credit
scores of many Americans who have less than stellar or
borderline credit score ( upper 500 to the low 600s ) by
20 points or more depending on the details of their
- “People who have strong credit scores need not consider
UltraFICO scores but they could use it as a second
chance,” says Sally TayloShoff Vice President of
- Consumers with an average bank-account of $400 and
with no history of negative balances are more likely to
benefit because it will take into account how old your
bank-account is, the frequency of activity and evidence
- It will particularly benefit millennials( people aged 18-
34) who did not have the opportunity to build up a
credit history. It will also help people who are in a
financial rut and are rebuilding their credit scores.
- It also might be easier for millions of Americans to get
any type of loan including a mortgage loan-especially if
they have a subprime credit score (500-600 FICO) or
have little or no credit history at all. The new UltraFICO score has “definitely a lot of promise”
as an alternative scoring method, provided the consumers
have true control over what level of detail they share and
whether to share information or not.
However, it is not clear whether the other two credit bureaus
Equifax and TransUnion will eventually participate in the
Ultra FICO test. TransUnion in an email statement said that
“it applauds all efforts that promote financial inclusion and
expand economic opportunity” but Equifax did not comment
on this.“According to Smith” The new scoring system is
revolutionary as consumers will play a direct role, for the first
time ever to determine their own credit scores.”
FOR CREDIT SCORE ENQUIRES CONTACTTOLL-FREE NO. (800) 400-ZINU(9468)