Credit scoring agency, FICO [1], along with Experian [2] and Finicity [3] recently launched a new credit score called UltraFICO Score. The new credit score leverages account aggregation technology and distribution capability from Experian and Finicity to help consumers improve access to credit by tapping into consumer-contributed data, such as checking, savings, and money market account data, that reflects responsible financial management activity.
The three companies estimate that this new score has the potential to improve credit access for the majority of Americans and is particularly relevant for those 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 who are relatively new to credit with limited history or those with previous financial distress that are getting back on their feet stand to benefit the most from this new system.
"This changes the whole dynamic of the lender and customer relationship," said Jim Wehmann, EVP, 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. The pilot is designed to validate the score and assess the willingness of consumers to share financial data for a potentially higher score. Pilot participants were sourced across various lines of businesses.
"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," said 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," said Steve Smith, CEO, Finicity. "We are proud to have created a new way for consumers to share financial information, safely and securely so that a new UltraFICO Score can be created."