New UltraFICO score could boost credit access for consumers

A new FICO credit score, launching in 2019, could be good news for consumers who don't quite have the credit scores they need to qualify for a financial product or for the terms they were hoping for.

The UltraFICO score is an opt-in credit model that uses information from your checking, savings or money market accounts to supplement data already in your credit report. It's meant to boost your existing FICO score, which ranges from 300 to 850.

If you are already in the excellent credit range and don't need additional points for approval or to qualify for the best terms, it won't be offered to you. But this supplemental information can be especially helpful for consumers with scores in the upper 500s to lower 600s, considered bad to fair credit.

The UltraFICO score — distributed by credit bureau Experian — will be pilot-tested "at a handful of lenders," including online, nontraditional lenders as well as credit unions, starting in early 2019, said David Shellenberger, senior director of scores and predictive analytics at FICO.

Here are answers to some common questions about the new credit score:

The UltraFICO score, Shellenberger said, is almost like a "second-chance score" that tends to benefit consumers with "thin" files or little credit history and those trying to rebuild after a personal financial crisis.

Credit newbies are more likely to see a significant benefit, assuming they have not had a negative account balance in the past three months and maintain a savings balance of $400 or more.

Shellenberger said FICO plans to make the UltraFICO generally available later in 2019, likely summer.

The new score looks at deposit accounts, such as savings accounts, as well as some account activity (PayPal and Venmo, anybody?).

"It almost seems like this allows the really big, kind of 'dinosauric' lenders to compete with the more nimble online lenders that rely less on traditional credit report information and more so on cash-flow metrics," credit expert John Ulzheimer said.

Ulzheimer sees both pros and cons.

The biggest pro is you can get credit for the banking that is done outside traditional institutions. The biggest drawback? Releasing yet more personal data.

FICO has another model that is designed to help score more people, and that uses nontraditional data.

The FICO XD score, which is still being used, generates scores to help people who do not have traditional credit scores qualify for credit cards.

The XD score, however, does not require that you have a deposit account as the UltraFICO does.

Another difference is the UltraFICO is designed for broader use — loans as well as credit cards.