Starting in 2019, FICO is launching the UltraFICO program, which may give you a higher credit score if you’re applying for a loan for big ticket items, such as a car or house, and it might even get you a better interest rate, as well. What makes this credit score different? It looks at your banking information.
How Does the UltraFICO Score Work?
Unlike a traditional FICO score, the UltraFICO score adds banking activity, from your checking, savings, or money market accounts (whichever ones you choose), including how long the account(s) have been open and how active they are. It uses this information to generate a new credit score within the same 300 to 850 point range. Depending on your banking activity and the account(s) chosen, you could see an increase in scoring by as much as 20 points, according to experts at FICO. The increase could mean the difference between approval and denial, or even a lower interest rate on a car loan.
If you’re a young car buyer with little to no credit history, the UltraFICO scoring model could benefit you. The trick is to maintain an average balance of $400 in the account chosen by FICO, and to have no negative balances in the past three months. You also need to opt in to the score from FICO, as it isn’t automatically given out and is expected to only be an advantage to borrowers with low credit scores and/or thin credit files.
What Does the UltraFICO Score Look For?
It takes time to establish a good credit history, and sometimes there’s no waiting for major purchases like a vehicle if you need it to get around every day. But, if you regularly use your bank account to pay bills, the UltraFICO score can work to your advantage. Because the UltraFICO score looks at your bank account instead of your credit history, the score is impacted by three factors:
- How much money you maintain in the account
- How long you’ve had the account
- How frequently you transact or overdraw
The bottom line: if you watch your bank account closely and carry a decent balance in it, the UltraFICO score can be a viable option when it comes to getting approved for auto financing. Lenders can’t use this scoring model until summer of 2019 and it’s their choice to use it or not, but you can take extra steps to build your credit in the meantime.
Need a Car Now?
It will take some time before the UltraFICO score officially launches, and if you can’t wait for a car loan, you may feel stuck. But have no fear, Auto Credit Express is here. We're teamed up with a nationwide network of special finance car dealerships, and they're signed up with lenders that are willing to help consumers in unique credit situations. We want to help connect you with a local dealer today, so get started by filling out our free online auto loan request form.