FICO Will Create New UltraFICO Score that Looks at Deposit Accounts
FICO credit scores are one of the most important financial indicators. You need a good score to get a loan, apply for credit cards and even to rent a house or get a new job. The scoring system has been the same for almost 30 years, but now a new score is expected to roll out soon.
The new scoring system is called UltraFICO and is expected to become available in early 2019. It will factor in how consumers manage the cash in their checking, savings and money-market accounts. It is among the biggest shifts for credit reporting and the FICO scoring system.
The new score is designed to boost the number of approvals for credit cards, personal loans and other debt by taking into account a borrower’s history of cash transactions, which could indicate how likely they are to repay. The change will be most beneficial to anyone who has a credit score in the low to mid-600’s, according to FICO.
It will also help those who are young, or who’ve had debt problems in the past, but who have money in the bank and aren’t bouncing checks.
To improve the UltraFICO score in the new model, the two most important things a consumer can do is keep over $400 in the bank, and not overdraw your account. That’s something that can be easily achieved by most people.
Conclusion
The new UltraFICO score should help many people who could have the ability to take more debt like loans or credit cards, but have low scores with the current system. People will scores already in the high 700s and 800s will probably not see much of a change.
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