- UltraFICO leverages bank data to give lenders a broader picture of a consumer’s financial behaviors.
- Consumers must opt in during the application process with a lender. Lenders cannot opt consumers in on their behalf.
- UltraFICO is ideal for individuals that are unscorable due to a thin credit file.
- UltraFICO will not impact your overall credit score or your credit file.
UltraFICO is a collaborative credit-scoring model developed by FICO, Experian, and Finicity. It’s designed to create a more holistic picture of an individual’s credit profile by showcasing non-traditional data. This can help individuals with limited credit history gain access to credit in situations where they may be denied otherwise.
How UltraFICO Works
FICO, the most common credit-scoring model, considers five factors — payment history, amounts owed, length of credit history, credit mix, and new credit. For an individual with a thin file, or someone who’s new to building credit, it may be challenging to boost their score. This is because several factors of a FICO score are dependent on demonstrating positive behaviors over time, which you can’t speed up.
The UltraFICO model allows individuals with thin credit files to leverage positive financial behaviors, like personal bank data, to increase their score. This includes information like:
- The length of time your bank account(s) have/has been open
- The recency and frequency of your bank transactions
- Proof of consistent cash on hand
- A history of having positive account balances
Consumers must opt in on their own; lenders cannot opt a consumer in without their permission. Once you opt in, you can share bank data from checking, savings, and money market accounts to supplement your existing credit data.
UltraFICO is offered during the lending application process. When you apply for a loan or other line of credit, lenders may offer you the opportunity to share bank data via UltraFICO. This gives them a more in-depth picture of your financial situation.
That said, the information you share will not replace or impact your regular FICO score. The program also isn’t offered by all lenders, so it may not be available to you at this time.
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Pros And Cons Of UltraFICO
UltraFICO allows consumers with a thin credit file to improve their credit score by leveraging banking activity. This may allow consumers to get approved for credit in cases where they’d otherwise be denied.
That said, there are a few downsides to be aware of. The information UltraFICO collects isn’t necessarily indicative of proper financial management. For example, having a large bank account doesn’t always mean you know how to manage credit. This could allow consumers to get approved for credit when they might not be ready to manage it. Consumer Reports also cautions consumers on the risk of sharing sensitive bank information with a third party.
Additionally, some lenders may not allow UltraFICO scores. In these instances, you’ll have to use your standard FICO score, which isn’t based on banking data.
How To Sign Up For UltraFICO
Currently, UltraFICO is in its pilot phase with just a few lenders. If you’d like to sign up, reach out to the lender you’d like to work with and ask if UltraFICO is available.
UltraFICO Vs. Experian Boost
Both UltraFICO and Experian Boost do similar things — they allow consumers to increase their credit score by leveraging non-traditional data. The major difference is that while UltraFICO leverages bank data, Experian Boost considers your history of on-time bill payments.
While UltraFICO won’t increase your standard FICO score, Experian Boost will. This is a key difference to keep in mind as you decide which tool to use.
Bottom Line: Is UltraFICO Good?
The introduction of UltraFICO marks a significant shift in credit scoring, offering a more inclusive option for individuals with a thin credit file. The opportunity to leverage bank data provides consumers with limited credit histories an option to improve their score and qualify for financial products they wouldn’t otherwise.
That said, it’s important not to lose sight of your standard credit score. The vast majority of lenders currently don’t have access to UltraFICO, and therefore only accept standard credit scores. Thus, it’s wise to focus on proper financial behavior across the board and not rely on UltraFICO being available.
Frequently Asked Questions (FAQs)
What differentiates UltraFICO from traditional credit-scoring models?
UltraFICO allows consumers to leverage bank data to boost their score, while traditional credit-scoring models don’t take this into account.
How can consumers opt into UltraFICO and what data is used?
When you apply with a lender, you may have the option to opt into UltraFICO and provide bank data. This information is then shared with the lender to give them a broader look at your financial behaviors.
Who stands to benefit most from the UltraFICO scoring model?
Individuals with a thin credit file, or those that don’t have enough data on file to generate a credit score, will benefit most from the UltraFICO scoring model. This addition of bank data will create a more full file, giving lenders a better insight into their finances.
Will UltraFICO boost my overall credit score?
No. Your UltraFICO score is separate from your overall credit score. Any bank data that’s factored into your UltraFICO score will remain separate from other credit-scoring models.
Does UltraFICO impact my credit file?
No. UltraFICO will not change any of the information on your credit file.
Find out more
- Essentials of Credit Repair – An in-depth look at the credit repair process.
- Understanding Credit Score Ranges – Learn about the implications of having a low credit score.
- Costs of Credit Repair Services – Get informed about the expenses involved in credit repair.
- Maintaining Accurate Credit Reports – Steps to update and correct your credit report.
- Credit Inquiry Types Explained – Understanding the difference and impact of soft and hard credit inquiries.
- Selecting the Right Credit Repair Company – Advice on choosing the best credit repair company for your needs.
- Factors Affecting Your Credit Score – Delve into what really affects your credit score.
- Achieving a Strong Credit Score – A guide to understanding and achieving a strong credit score.
