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UltraFICO is a credit scoring model created by FICO, Experian and Finicity to expand access to credit to more consumers. This new score takes into account personal bank account information, which traditional credit scoring models do not take into account, in addition to an individual’s credit history.
This opt-in credit model helps people with below or above average personal credit scores improve their existing FICO score. This can help you qualify for future loans or at a better interest rate.
How UltraFICO works
UltraFICO assesses your personal banking information and behavior as it gives lenders a better picture of your overall finances. When you connect your checking, savings, or money market account, it checks:
1. How long has your account been open?
2. The frequency of your banking transactions
3. How much money you have on hand
4. For a history of positive sales
To get your UltraFICO score, you must first apply for credit. If a bank or lender denies your loan or credit card application, you can ask the lender to use UltraFICO instead of your FICO score.
Who benefits from UltraFICO
UltraFICO is designed to help all consumers, regardless of their credit rating. However, it may be more beneficial if you have poor or fair credit (less than 670) or minimal credit history. If your credit score is within this range, it is more likely that you will not meet a lender’s minimum creditworthiness requirements or be eligible for the most desirable interest rates.
However, if your credit is good to excellent (at least 670), you can already meet a lender’s minimum credit score requirements and qualify for the best rate.
How to register for the UltraFICO score
To register for your UltraFICO score, you can visit Ultra Fico registration page. The program is still in its pilot phase and is only available through a small group of lenders. You can only access the program if one of these lenders has denied you access to credit or if one of these lenders has given you unwanted credit terms. However, you can sign up to be notified when the UltraFICO score becomes widely available to consumers.
The registration form asks you to provide the following information:
• Last name
• Company and title
• Telephone number
Once you have filled in this information you will need to choose whether you are interested in the product for yourself or for your business. Then, agree to the terms and privacy notice before submitting your request.
UltraFICO vs. FICO
Although your UltraFICO score is based on your FICO score, the two are not the same. Your FICO score does not take into account how you handle money in your personal bank or money market account.
Instead, your FICO score relies on traditional credit score factors to calculate your score, as shown below.
When you apply for credit, a lender can see your FICO score, but they won’t see your UltraFICO score if you don’t agree to the service.
UltraFICO vs. Experian Boost
Like UltraFICO, Experian Boost is another way for you to increase your FICO score. Instead of assessing your overall banking habits, Experian Boost takes other non-traditional factors into account, such as your phone’s payment history, streaming service, and utility bills.
Experian Boost is also different from UltraFICO in that you don’t have to apply for credit to use its services. When you create an account, you connect the bank account you pay your bills with to look for boost opportunities.
By signing up for Experian Boost, you get free access to your Experian credit report and FICO score, and you receive credit monitoring alerts.
Other ways to improve your credit score
If you don’t want to wait around for the UltraFICO scoring model to become widely available, here are four steps you can take right now to improve your credit score.
1. Pay your current bills on time
Since payment history is 35% of your credit score, according to the FICO scoring model, you need to pay your bills on time to improve or maintain your current score. If you pay your bills more than 30 days late, lenders may report the late payment to the credit bureaus, which would damage your credit score. In addition, the late payment will remain on your score for seven years. However, its impact will diminish over time.
2. Check your credit report
To view your credit report, visit AnnualCreditReport.com. Normally, federal law allows you to get a free copy of your report each year. However, due to the Covid-19 pandemic, you can get free weekly credit reports until April 20, 2022.
If you have inaccurate or incomplete information on your credit report, it could lower your credit score. For example, you might have an overdue debt on your report that doesn’t belong to you. When this happens, under the Fair Credit Reporting Act, you have the right to challenge it.
You can do this by reporting the false information to the three major credit bureaus – Experian, Equifax, and TransUnion – and the company that reported it. The Federal Trade Commission has examples of protest letters on its website.
3. Ask someone to register you as an authorized user
Taking advantage of someone’s good credit history could increase your credit score. To do this, you will need to find someone willing to sign up as an authorized user on one of their credit cards. The advantage of having them listed for you is that their good credit history will be reflected on your credit report.
However, the downside to this option is that if the person who lists you as an authorized user defaults or misses a payment, that negative information will also be reflected on your report.
4. Pay off your debt
The amount of debt you owe plays a huge role in calculating your credit score – it is 30% of your score, according to the FICO scoring model. For this reason, paying off your debt over time can improve your credit score. If you have credit card debt, try to keep your credit utilization ratio – the amount of debt you incur against your overall credit limit – below 30%, if possible.