FICO To Unveil New Credit Score, Giving More Cash-Heavy Individuals Access to Credit

Fair Isaac Corp. is planning on rolling out a new version of its FICO credit score with the objective of increasing the number of individuals who are approved for credit cards, personal loans, and other types of debt, according to a published report.

The new score, called UltraFICO, will factor in how individuals manage the funds in the checking account, savings account, and money market accounts. Since it was unveiled, the FICO score has evaluated an individual’s credit history and, using a proprietary algorithm, assigned a score to an individual that assesses the person’s ability to repay a loan. The UltraFICO will attempt to include the cash history for individuals, as well, and is being hailed as the “among the biggest shifts ever for credit-reporting and the FICO scoring system.”

About 7 million individuals who currently have low credit scores because they do not have a long-enough history of borrowing would see their credit scores increase under the UltraFICO model, according to the company. While opening up availability of credit to those who have never been able to receive it because of a lack of borrowing history is a good idea on paper, critics of the idea say that the UltraFICO score could make some individuals with low credit scores look more credit-attractive than they really are.

From the company:

If a consumer’s traditional number falls short, a lender can offer to have the score recalculated to reflect banking activity. Would-be borrowers with at least several hundred dollars in their accounts, who have had them for a while and who transact frequently and don’t overdraw are likely to see their scores rise, according to FICO.

The average credit score in the United States is 704, which is a record-high. Individuals with a credit score below 620 are considered to be subprime and among the riskiest and least likely to repay their debts. FICO’s credit scores range from 300 to 850.


Check Also

22 Companies Seeking Collection Talent

During this, The Great Resignation Era, I thought it would be helpful to start a …

Leave a Reply

Your email address will not be published. Required fields are marked *