UltraFICO vs Experian Boost: new tools to jumpstart your credit
The rules for getting a decent credit score haven’t changed much since credit score was invented: pay all your bills on time, don’t use too much of your available credit, and build a long history of responsible behavior.
But credit novices and those looking to rebuild after missteps now have two new tools they can use: Experian Boost and UltraFICO. Both reward good financial habits that are not recognized by current credit scoring models.
Credit bureau Experian and analysis firm FICO, best known for its FICO credit score, say they created Boost and UltraFICO to help people new to credit or those who want to rebuild it. They are more likely to help those who have scores in the 500s and 600s, say the companies.
To reinforce launched in March 2019 and is available to consumers on the Experian website. UltraFICO is in the pilot phase and will be widely released in spring 2020, according to FICO. The score is tested by a handful of financial institutions such as PenFed Credit Union and credit card startup Deserve.
Both products have quirks that you should understand. Here is the information on Boost and UltraFICO and how to decide to use them:
Know how your credit is rated
See your free score and the factors that influence it, as well as information on how to keep building.
How Boost and UltraFICO Work
This free service allows you to add points to your existing credit score. Here’s how:
Register on the Experian website and connect your bank account information, allowing Boost to analyze your transactions for utility and cell phone payments.
Select the invoices that you want to add to your Experian credit report. Choose only the bills that you know you paid on time. Because scores are calculated from information in your reports, adding these positive payment records can improve your score.
Check your progress. Signing up for Boost also gives you free access to your FICO score, so you can see the immediate effects of using it.
Experian says Boost can benefit FICO 8, FICO 9, and VantageScore 3 and 4 – all common scores used by lenders. But the effect only appears when a lender uses your Experian credit report with one of these scoring models. If a lender reviews the scores based on your TransUnion or Equifax credit reports, they won’t see the change.
Also, if you froze your Experian report, you can still use Boost; you must unfreeze it before applying for credit. You can unsubscribe anytime.
One potential downside: Lenders who don’t know about it may interpret utility and cell phone payments on your credit report as part of your debt, which could affect your chances of qualifying for a loan or credit card. credit. Experian says it “works with lenders to make sure they understand these positive payments.”
This new type of FICO score is free, but you must register. It works in two stages:
You register with FICO’s website and link your bank accounts, which allows it to scan your transactions. The scoring algorithm checks if you still have cash, how long your accounts have been open, how active they are, and how often you have a negative balance.
Before applying for a credit card or loan, ask the lender if they use UltraFICO. Apply normally. If the lender finds that your credit is not good enough to qualify, you can ask them to check your UltraFICO to see if you have a second chance. Your credit is only drawn once during the entire process, says Gregory Wright, director of products at Experian Consumer Information Services.
What there is to know: Unlike Boost, you can’t check your UltraFICO score to see the effect. The only time you can see it is if you are refused after the lender’s second look; he’ll send you a notice in the email explaining why, says David Shellenberger, vice president of scores and predictive analytics at FICO. As with Boost, you can unsubscribe at any time.
Decide to use Boost or UltraFICO
If you know that you are managing your money responsibly and your score is not reflecting it, Boost and UltraFICO may be worth exploring. However, you need to be comfortable share your bank account information.
Experian says nearly two-thirds of consumers who signed up since the launch of Boost have added points to their score, with an average jump of over 13 points. Some users have reported issues connecting their accounts, especially those with USAA Bank, an issue Wright says Experian is trying to resolve.
Currently, Boost and UltraFICO only work with credit scores based on data from your Experian report.
Traditional methods of construction loan, although slower to display results, are more likely to help all versions of your credit score:
You can apply for a secure credit card.
You can take out a loan on credit from a lender who reports to all three credit bureaus.
You can also request to be added as an authorized user to the credit card account of someone who has a good payment history. Again, verify that the card issuer forwards the authorized user information to all three offices.