The announcement of the new Ultrafico credit score is creating quite a buzz in the financial world.

The major cause for interest is that the credit score creates more opportunities for people who are normally overlooked or denied access to higher financial products.

This group of people include immigrants, self-employed people, fresh out of college workers, and people whose bank accounts have gone through bankruptcy in the past. 

The new UltraFico credit score is a model designed to improve any existing FICO score – which could be anything from 400 to 850.

It uses information gathered from your savings and checking account and adds it to your credit report, giving it a boost.

The UltraFico score considers the amount you have in savings in addition to the activity and period of time the account has been in existence. 

UltraFico targets people who are not in such a good credit range and need extra points for credit approval, so you may not be offered one if you do not need additional points. For example, consumers who have scores which are considered fair or downright bad credit will find the information extremely helpful to them. 

Who will benefit from the UltraFico Score? 

The main goal of the credit score is to give a second-chance, and this can be especially helpful to two categories of people: 

  • New consumers with little history 
  • Existing consumers who have suffered a bankruptcy or other financial crisis and need to rebuild 

Consumers who are still new will most likely see the most benefits from UltraFico score.

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This is of course pertaining to the condition that they have maintained a fair balance in their savings account, and have not gotten into any large, incriminating debts that affected their account balance in the most recent months. 

David Shellenberger, senior director of scores and predictive analytics at FICO has said that 40% of credit newbies saw an increase of 20 points or more. And of the consumers who have maintained a positive savings account balance in the past with a healthy deposit account balance, 70% had a score improvement once that information was added to their data.

Even consumers who had suffered past financial distress can also profit, as 1 out of 10 consumers experienced a 20 point increase, the senior director also said. 

People who are most likely to be offered the option of UltraFico are consumers who are just shy of reaching scores which are necessary for credit card approval.

For example, consumers having scores from 600 – 699 are ideal candidates for a credit approval, but are simply shorting a few points needed.

These are prime candidates for UltraFico; 

  • Lenders using an Experian credit score 
  • Consumers who have scores that are just below the needed cut-off for credit approval 

Credit expert, John Ulzheimer said, “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,”. 

The credit expert further revealed his interest in the new score, and has already started weighing the pros versus the cons of the UltraFico score.

He considers it to be a huge benefit that consumers can now get credit for banking business, all done beyond what has previously been the norm.

And, of course, the biggest problem is that consumers are forced to have even more of their personal business and details examined by more organizations, allowing room for more breach of trust. 

The announcement of the new Ultrafico credit score is creating quite a buzz in the financial world. Here's how it can increase credit score: #creditscore #moneytips #improveyourcreditscore