"Ultra-FICO" to Boost Credit Scores Giving Millions More Access to Credit

Just in the nick of time not: Fair Isaac is launching a new type of credit score that will give millions more credit.

Just as the economy is peaking, consumers with a low FICO could get a higher "UltraFICO", a new score that factors in bank-account activity as well as loan payments.

Credit scores for decades have been based mostly on borrowers’ payment histories. That is about to change.

Fair Isaac Corp., creator of the widely used FICO credit score, plans to roll out a new scoring system in early 2019 that factors in how consumers manage the cash in their checking, savings and money-market accounts. It is among the biggest shifts ever for credit-reporting and the FICO scoring system, the bedrock of most consumer-lending decisions in the U.S. since the 1990s.

The UltraFICO Score, as it’s called, isn’t meant to weed out applicants. Rather, it is designed to boost the number of approvals for credit cards, personal loans and other debt by taking into account a borrower’s history of cash transactions, which could indicate how likely they are to repay.

The new score, in the works for years, is FICO’s latest answer to lenders who have been clamoring for a way to boost loan approvals.

UltraFICO is the latest in a recent series of changes by credit-reporting and scoring firms that are helping boost consumers’ credit scores.

Equifax, Experian and TransUnion last year began deleting most tax-lien and civil judgment information from credit reports. They also have been removing certain accounts in collections, following settlements with state attorneys general dating back to 2015 over how they manage errors and certain negative information on credit reports.

Eight million consumers who had collections accounts completely removed from their credit reports in the 12 months ended in June experienced a credit score increase of 14 points on average, according to a recent Federal Reserve Bank of New York report.

What Can Possibly Go Wrong?

  • We are in the final inning of an economic recovery
  • It would be unusual if bank account balances did not look better
  • FICO will loosening credit standards on top of collections updates

Late Cycle Lunacy

The changes are not meant to weed out applicants. Rather, they are specifically designed to boost the number of approvals for credit cards, personal loans and other debt.

These kinds of changes are best made after market and recession bottoms. By all means give more credit to those who handled themselves well in times of stress.

This is more late-cycle lunacy.

Mike "Mish" Shedlock

No. 1-18

Just what the economy needs: More debt....NOT

On the plus side this should keep the economy going until 2020 so Trump should be getting re-elected but long term this just makes the eventual crash larger.


I don't understand why this would over all give MORE access to credit. Surely it would cut both ways, reducing the credit score of some people?


@mark0f0 said: "Just as they might be using such data to create more products today to help lenders loosen credit, the additional data they're accessing may very well be used in the future to tighten credit."

I think Mark is correct. Although the UltraFICO program is being touted as a way for underserved consumers to access credit, from the point of view of lenders it is probably aimed at improving visibility into the cash side of balance sheets so they can cut off credit earlier if they see warning signs.

Regarding the timing of the rollout, it is a pilot program. Lenders probably want to collect initial data to see how cash transactions relate to consumer repayment of credit during an economic contraction. As Mish points out, a cost of collecting this initial data may be that lenders have a little more consumer credit exposure during the next contraction than they otherwise would have, but for lenders that trade-off is probably a reasonable cost of doing business. What better time gain valuable data from a pilot program? Anyone who has ever dealt with a lender knows that they want to boost loan approval AND get paid (or they at least want enough time to pass any hot potatoes to someone else).

FYI: There seems to be a bug in the "edit" function for this site. If I make a post, sign out, clear browser history, and then sign in again shortly after to make a minor edit, the original post ends up being permanently deleted.


"The new score, in the works for years, is FICO’s latest answer to lenders who have been clamoring for a way to boost loan approvals."

If lenders want to boost loan approvals, just check to see if the applicant is breathing. It worked so well during the housing bubble, when Greenspan took the lending standard to ZERO.


credit scoring in no way communicates capacity to repay. only thing worse is under-writing based on character.