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UltraFICO's Effect on Getting a Mortgage

January 4, 2019 — 2 min read

How FICO's new credit score could make it easier to get a home loan

FICO recently announced a new way to score credit: UltraFICO. Potential borrowers - especially those in the 500 to 600 FICO score range or who have little to no credit history - may be able to qualify for mortgages they previously didn't qualify for. UltraFICO does this by helping to establish credit based on banking and savings activity, rather than credit cards, loans, and other debt.

How may this affect getting a mortgage?

Here's how:

For potential borrowers, enhancing credit scores with UltraFICO may help them qualify for a mortgage they previously did not qualify for. It may even improve the terms of a loan or open up new financial opportunities when it comes to the details of a loan. UltraFICO may act like a "second-chance score" to benefit two main groups of consumers:
  • Those with little-to-no credit history.
  • People rebuilding credit after a personal financial breakdown.
For lenders, UltraFICO allows them to enhance a borrower's traditional FICO credit score by pulling non-traditional financial information. For borrowers in the 500-600 range, this could turn a "no" into a "yes." Lenders use financial details previously not visible on a traditional credit report:
  • Evidence of saving money
  • Maintaining a bank account over time
  • Avoiding a negative balance in an account
  • Regularly paying bills
  • Making other bank transactions
The new score may impact approximately 15 million consumers. It may help those consumers who currently don't have the debt history required for a traditional FICO credit score. The new UltraFICO Score is scheduled for launch as a pilot program in early 2019. It is expected to be available to lenders by mid-2019.

Have questions about UltraFICO? Think you may want to use it to qualify for a loan? Contact us or fill out the form below!