A new FICO credit score launched in 2019 can be good news for consumers who do not quite have the…
A new FICO credit score launched in 2019 can be good news for consumers who do not quite have the credit points they need to qualify for a financial product or the terms they hoped for.
UltraFICO Points is an opt-in credit model that uses information from your control, savings or money market accounts to complement data already in your credit report. The information taken into account includes how much you have in saving, how long your accounts have been open and how active they are. It is supposed to increase your existing FICO score, ranging from 300 to 850.
If you are already in the excellent credit area and do not need additional credits for approval, or to qualify for the best possible win, water It is offered to you, but this supplementary information may be particularly useful to consumers with points in the over the 1
5th to the lower 600s, which are considered bad for fair credit.
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UltraFICO score – distributed by Experian, one of three major reporting agencies, comes to be tested “at a handful of lenders”, including online, non-traditional lenders as well as credit unions starting in early 2019, “said David Shellenberger, Senior Manager of Ratings and predictive analytics at FICO.
Here are answers to some common questions about the new credit score:
The UltraFICO score, Shellenberger said, is almost like a “second chance” that usually favors two consumer groups:
Credit beginners are more likely to see a big advantage, provided they have not had a negative account balance over the past three months and maintain a decent savings balance. (Shellenberger referred to a “moderate amount” of savings, which means $ 400 or more.)
FICO said that among consumers who had maintained a positive balance in an account and maintained an average of at least $ 400 in a savings account, each 70% improved their score with the addition of that information. Shellenberger said that 40% of credit beginners saw an increase of 20 points or more. Among those with previous financial needs – as an account in collections – one out of 10 saw an increase of 20 points or more.
The FICO score has risen in general. The latest average released in September was 704, an increase of 3 points from a year ago. According to data from FICO, 22.6% of consumers had scores between 600 and 699 – major credit approval candidates if they could handle a few points.
You are likely to be offered the UltraFICO option if:  Your score is just a few points during a cutoff.
Shellenberger said that FICO plans to make UltraFICO publicly available later in 2019, probably in summer.
The new score looks like deposit accounts, such as saving accounts, as well as some account activity (PayPal and Venmo, anyone?).
“It seems almost as if this allows the really big typical” dinosaur “lenders to compete with the more fancy online lenders who rely less on traditional credit report information and so on cash flow measurements,” said Ulrich Ulzheimer, credit consultant.
Ulzheimer said that he is fascinated with the new result and sees both advantages and disadvantages.
The biggest pro is that you can get credit for the bank that is done outside traditional institutions.
The biggest drawback? Ulzheimer believes that UltraFICO is likely to be offered people who were denied approval but barely – “almost there but not over the finish line.”
Ulzheimer believes that UltraFICO is likely to be offered to people who are denied approval, but hardly “19659009”. UltraFICO vs. FICO XD: What’s the difference?
FICO has another model designed to help make more people using non-traditional data.
FICO XD Score, Still Used, Generates Points to
However, the XD score does not require you to have an account that UltraFICO does.
Another difference is that UltraFICO is designed for wider use – Loans and credit cards. Then the points can earn some different consumers.
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Bev O & # 39; Shea is a writer at NerdWallet. E-mail: [email protected] Twitter: @BeverlyOShea.
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