Experian, FICO and Finicity announced a new credit score Monday during the Money 20/20 USA conference in Las Vegas.
The new score, called UltraFICO Score, from Experian and Finicity improves access to credit by including consumer-contributed data – such as checking, savings and money market account data – that reflects consumers’ financial management responsibilities.
Under the UltraFICO Score, a consumer grants permission to contribute bank-statement information, including the length of time accounts have been open, frequency of activity and evidence of saving, which can be electronically read by Finicity and combined with consumer credit information from Experian to provide lenders an enhanced view of positive financial behavior.
Experian, FICO and Finicity say that the new score has the potential to improve credit access for the majority of Americans, and it’s particularly relevant for people who fall in the grey area in terms of credit scores (scores in the upper 500s to lower 600s) or fall just below a lender’s score cut-off. Consumers relatively new to credit or those with previous financial distress stand to benefit the most.
“This changes the whole dynamic of the lender and customer relationship,” says Jim Wehmann, executive vice president, Scores, at FICO. “It empowers consumers to have greater control over the information that is being used in making credit risk decisions. It also enables a deeper dialogue between the consumer and lenders to help both parties make better financial decisions. It’s a game changer.”
The UltraFICO Score will launch as a pilot program in early 2019. If all goes well, it’s scheduled to be broadly available to lenders by mid-2019.
The model developed by FICO will be implemented through Experian and integrated into a lender’s existing operational workflow. Borrower data will be aggregated through Finicity. The UltraFICO Score builds off the framework of a base FICO Score.
“As the consumer’s bureau, our goal is to help empower consumers and to give better access to credit for more consumers, all while promoting fair lending,” says Alex Lintner, president, Consumer Information Services, Experian. “Through this project, we’ve found a new way to use consumer-permissioned data that allows lenders to make better decisions and helps consumers gain access to credit.”
“This approach allows Americans to benefit from positive financial behaviors,” adds Steve Smith, CEO, Finicity.
News Source: Florida Realtors.