Lenders and financial institutions use dozens of credit scores to evaluate potential borrowers, based on their consumer behavior and credit reports.
But for the first time, FICO is introducing something called an “opt-in” credit score, which can help consumers improve their credit.
It’s always been possible to boost your credit score by paying your bills on time, not spending over your limits, and maintaining a low credit-to-debt ratio. But with this new initiative from FICO, consumers can now grant permission to have positive financial data incorporated into their FICO score.
It’s called an “UltraFICO Score,” and it was developed with input from Experian, the well-known credit reporting agency, and Finicity, a financial data company.
What is an UltraFICO Score?
This score lets you choose to include additional information such as savings or checking account data that show you’re responsible with your money and finances.
With this additional information taken into account, many Americans hopefully will be able to boost their chances of gaining access to credit, which can be extremely difficult for those who have a bad credit score.
The truth is that a bad credit score can happen for a number of reasons. You may be dealing with a financial crisis caused by a recent layoff, divorce, car accident, or countless other scenarios. Unfortunately, banks and other traditional lenders often don’t take these personal details into account, so a low credit score can limit your ability to borrow from them.
To start adding data to your UltraFICO Score, you’ll need to grant permission to Experian and Finicity to electronically access bank statement information, so they can see how long you’ve had your accounts, how often you use them, and your saving habits.
This program is set to begin in early 2019, and lenders are expecting it to be widely available by the middle of the year. For Americans stuck with bad credit, an UltraFICO score could prove to be a helpful option.