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Fair Isaac’s UltraFICO May Be a Boon for Borrowers

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Fair Isaac Corp. announced on Monday a new scoring system that would take into account a borrower’s checking, savings, and money market account transactions. By including these activities with traditional FICO metrics, the new system could boost many consumers’ credit scores.

The new product, called UltraFICO, was unveiled at the Money 2020 in Las Vegas. It adds the additional data points with consumer consent to recalibrate existing FICO scores.

“It empowers consumers to have greater control over the information that is being used in making credit risk decisions,” Jim Wehmann, executive vice president, Scores, at FICO, said in a company statement.

The product is aimed at consumers with scores in the upper 500s to lower 600s or fall just below a lender’s score cut-off.  Thin-file, younger consumers, and those rebuilding credit may also stand to benefit from UltraFico mechanisms.

Lenders can implement the new scoring product through existing operational workflow, staring in early 2019, with a larger rollout planned for mid-2019.

Increasingly lenders are relying on alternative data to access creditworthiness of borrowers and to underwrite auto loans. FICO’s answer to alternative scoring, UltraFico, could potentially widen credit access for consumers that aren’t served by the current FICO scoring mechanisms, which largely haven’t changed since 1989. Although the scoring algorithm has been tweaked a few times, the most recent being this past summer.

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