UltraFICO: What it is and how it works

In 2018, the Fair Isaac Corporation (FICO), Experian and Finicity launched the new UltraFICO score. The goal of UltraFICO is to expand credit access and give consumers more control in the credit scoring process. It considers more factors that can help nontraditional borrowers get the credit they deserve.

If you feel like traditional credit scores don’t apply to you and you wonder if the UltraFICO score might help you get the credit you need, keep reading to learn more.

What is UltraFICO?

At its core, the UltraFICO score is just another credit score. However, the way this newer score is determined aims to expand credit access to consumers who may have had trouble achieving a regular FICO credit score in the past.

According to FICO, the UltraFICO may be especially relevant to consumers whose credit scores typically fall right under a lender’s cut off range, or those with traditional credit scores in the high 500s or low 600s. This can include consumers who are new to credit and have a limited credit history, but it can also include those who may have made credit mistakes in the past.

“This changes the whole dynamic of the lender and customer relationship,” said Jim Wehmann, executive vice president of Scores at FICO in a 2018 news release. Wehmann went on to say that the score “empowers consumers to have greater control over the information that is being used in making credit risk decisions” while enabling “a deeper dialogue between the consumer and lenders to help both parties make better financial decisions.”

How does UltraFICO work?

Where the traditional FICO scoring model considers five main factors — payment history (35 percent), amounts owed (30 percent), length of credit history (15 percent), new credit (10 percent) and credit mix (10 percent) — to come up with your FICO score, the UltraFICO considers a range of details normally overlooked by traditional scoring methods. This includes your banking information, which can be used to show a positive history of money management.

Specifically, UltraFICO scores take several banking factors into consideration, including:

• The length of time your bank accounts have been open
• Frequency of your banking transactions
• How recently you’ve made banking transactions
• Evidence you frequently have cash on hand
• History of positive account balances

If you don’t have traditional credit reporting from loans or credit cards, it’s easy to see how the UltraFICO score could benefit you. After all, this score lets you use your checking and savings account information to show you maintain a balance in your accounts, and that you’re making regular banking transactions, like deposits and bill payments.

According to FICO, 70 percent of U.S. consumers with “sound financial behavior” in their checking and savings accounts would receive an UltraFICO score that is higher than their regular FICO credit score.

Who should opt into UltraFICO?

Consumers who have a low FICO score, or no credit score at all, should consider utilizing the UltraFICO score. Fortunately, applying to receive an UltraFICO score when one becomes available is a simple process. All you have to do is head to the UltraFICO website and enter some basic contact information like your name, email and phone number.

What’s the difference between UltraFICO and Experian Boost?

If you’re trying to find ways to show a higher credit score, you can also look into a product called Experian Boost, which calculates credit scores using the FICO 8 credit scoring model. Using Experian Boost is free, and you should be able to use this program to show a better score in a short amount of time.

While Experian Boost isn’t a type of credit score, this program lets you receive credit reporting on nontraditional bills, like phone and utility bills. You also receive free credit monitoring and credit alerts when you sign up.

How to improve your credit score

Applying for an UltraFICO score may help you qualify for the credit you need, but there are other ways you can boost your credit history so you can show better credit using traditional scoring models. While building credit can take time, the best ways to improve your credit score include paying your bills on time and avoiding situations where you’re maxing out credit on revolving credit accounts. Also, make sure you don’t open or close too many accounts and that you keep older accounts open since they help you increase the average length of your credit history.

Another step you can take is figuring out whether you can improve your credit mix, which is a factor that considers the different types of credit you have. If you want the chance to build credit in a new way, for example, you can always start out with a credit card for bad credit or a secured credit card that requires a cash deposit as collateral. While putting down a deposit doesn’t sound ideal, secured credit cards are easy to get approved for, and they help you build credit since your payments are reported to the three credit bureaus.

The bottom line

The UltraFICO credit score stands to help consumers who have had trouble building traditional credit but are otherwise trustworthy when it comes to paying their bills. Consider signing up for this score if you think it might help you qualify for the credit you need, but also look for ways to build credit using traditional methods. With enough positive history and responsible use of the financial tools available to you, you’ll eventually build the credit you need to live the life you want.