Two recent credit announcements are attracting the attention of consumers and financial institutions alike. That’s because for many years, your credit scores were 100% reliant on the information in your credit reports as reported by your current and former lenders. That’s not necessarily the case any longer — at least not for consumers who choose to allow unprecedented access to their bank account information.
Let me be one of the first to introduce you to both UltraFICO and Experian Boost.
What Is UltraFICO?
UltraFICO is a new credit score first announced in a joint press release from FICO, Experian, and Finicity late in 2018. The free offering gives you the option to have your deposit account data possibly considered in your credit score.
The premise, according to FICO, is that adding this information will help many consumers who exhibit responsible management of their deposit accounts. In layman’s terms, if you use your checking and savings accounts responsibly — for example, without bouncing checks or incurring overdraft fees — then it might result in a slightly higher credit score.
UltraFICO is a notable departure from how credit scoring has worked for the past three decades. Prior to UltraFICO, every credit bureau score, including both FICO and VantageScore, was based on your credit reports. Nothing else has mattered from a scoring perspective.
The new scoring model will, for the first time, allow your credit scores to be influenced by information found outside of your credit reports themselves. This will be optional, meaning that if you’re not interested or willing to allow Experian or FICO to have access to your deposit information, then you can simply ignore the new service.
What Is Experian Boost?
On the heels of the UltraFICO announcement, Experian announced a new service of its own, Experian Boost. Here’s how it will work: If you grant Experian Boost permission to search your online banking information for utility bills and telecommunications payment data, that information would then be added to your Experian credit report — making it fair game for both FICO and VantageScore credit scores to consider during their scoring process.
This means that consumers who don’t have a credit card or other traditional means of building credit can nonetheless add some positive data to their credit profile if they have a solid track record of paying utility and phone bills on time.
Experian Boost is also groundbreaking in another way. Traditionally, the information on your credit reports comes from outside sources (e.g. banks, creditors, collection agencies, etc.). This will be the first time YOU will be able to add scorable information to your own credit report.
UltraFICO vs. Experian Boost: Similarities and Differences
UltraFICO and Experian Boost could both potentially raise credit scores for millions of consumers, especially those with thin or limited credit files. Here’s a side by side comparison to help you understand the similarities and differences between the two promising platforms.
|✔ Influences Experian-based credit scores only.||✔ Influences Experian-based credit scores only.|
|✔ Consumer opt-in required.||✔ Consumer opt-in required.|
|✔ Uses Finicity to access your bank account data.||✔ Uses Finicity to access your bank account data.|
|✔ Considers your deposit account data itself (historical balances and account history).||✖ Does not consider your deposit account data itself.|
|✖ Does not specifically consider utility and telecom payment data.||✔ Considers utility and telecom payment data.|
|✖ Does not add information to your Experian credit report.||✔ Adds information directly to your Experian credit report.|
|✔ Works with FICO 8 and FICO 9 credit scores at Experian.||✔ Work with ANY Experian-based credit score that considers utility style data, including those built by FICO and VantageScore.|
Be Patient and Realistic
The fact that UltraFICO and Experian Boost have been designed to give consumers more control over their credit scores is encouraging. Having said that, keep in mind that with either option, you’re going to have to give access to your banking account data, which includes giving away your user name and online banking password.
Of the two options, I like Experian Boost more because it will allow you to actually add something to your Experian credit report. With UltraFICO, your deposit account information isn’t added to your credit report, but it is considered.
More by John Ulzheimer:
- What Your Credit Report Says About You Behind Your Back
- Credit FAQ: When Does a Late Payment Show Up on My Credit Report?
- Three Legitimate Ways to Raise Your Credit Score Fast
- Raising your Credit Score in 12-Months
John Ulzheimer is an expert on credit reporting, credit scoring, and identity theft. The author of four books on the subject, Ulzheimer has been featured thousands of times over the past decade in media outlets including the Wall Street Journal, NBC Nightly News, The Los Angeles Times, CNBC, and countless others. With professional experience at both Equifax and FICO, Ulzheimer is the only credit expert who actually comes from the credit industry. He has been an expert witness in over 230 credit related lawsuits and has been qualified to testify in both federal and state courts on the topic of consumer credit.