Posted by William Charles on October 21, 2018
Credit Scores

Published on October 21st, 2018 | by William Charles


FICO To Create New Credit Score ‘UltraFICO’ Based On Checking History

Fair Isaac Corporation is the creator of the most commonly used credit scoring models, called ‘FICO Scores‘. The different variations of these scores are used in 90%+ of lending decisions. Existing scores primarily focus on an individuals repayment history, although these scores also look at things such as credit history length and types of credit use (e.g installment/revolving). According to the WSJ FICO plans to release a new scoring model called ‘UltraFICO’.

The idea behind UltraFICO is to allow lenders to lend to more borrowers by taking into account an individuals history of cash transactions. UltraFICO will be an optional extra that lenders can use when an individual is denied based on their traditional FICO score. UltraFICO will look at things such as:

  • Current checking balance
  • Length of checking history
  • Transaction frequency
  • Overdraw history

Individuals will be able to choose which checking accounts they want to be considered when scores are recalculated using UltraFICO. As with any change to credit scoring models how successful this will be will depend on adoption rates and how this scoring model does at predicting credit worthiness. It seems strange that the loan applicant gets to choose which checking accounts are considered, if you have overdrawn from an account before then you’d obviously want to exclude that account. It’s also not clear where FICO plans to get the checking data from in the first place.

Thankfully this shouldn’t affect those of us who churn bank account bonuses as this is a secondary scoring model that is only used when you would have originally already been denied. Given that you can choose the accounts it scores based off as well, you would simply pick your accounts with a healthy balance that you’ve had for a long time with no overdraw history.

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Sounds like something that will only be used for secured credit card applications. Maybe some low end no rewards CC as well.

Makes no sense for secured cards since the credit card companies have no exposure with the security deposit consumers put down equal to the credit line.
Thid would be for consumers who have never had a credit card or very little history I would guess.

I could see it making sense for some secured cards that do partial deposits like Cap One, but I agree on it making more sense for using it on people with thin files. Also a great way for FICO to get an ability to possibly (in time) start competing with ChexSystems if they are aggregating data on both credit history and checking account history.

Over time some secured cards will give out a little more credit than the security deposit, so there can be some exposure.

Mortgage apps look at 3 months of checking account transactions. How far back is the Ultra man going to look?

I bet it works like Mint or Personal Capital. Maybe you can link your checking accounts to the “ultra” FICO and get a few extra points in exchange for giving up account data that they wouldn’t otherwise be able to get their hands on.

Look to a little know Co called Early Warning Services. They are the evil behind “Zelle”. If I were a betting man, I’d bet they are the source of this data.

I think Early Warning reports only have inquiries and negative data, so they wouldn’t have data like your current balance or transaction frequency.

Does thia make it easier for others to know how much money I have?

No worse than EWS.

Dan - Legal Bank Robber
Dan - Legal Bank Robber

And for some reason I have a feeling my lol/12 Chex report will not help me with this. Smart idea in concept but I don’t think it will benefit us churners. But like you said it won’t harm us.

Will, you just made my heart drop!

I read the headline and thought this would be the death of bank churning!

haha me too! I thought “no I just got started on this!”. I think we’re just a little on edge for when good things will come to an end given all the recent negative changes

WOW, I do not like this at all. It seems as technology progresses, companies and the Government are able to gather more and more info about our daily lives. I see a time when this will be used like Chexsystems and they will really punish us churners as our average age of accounts will be low. I only started this “hobby” after i found this site earlier in the year and I am sure i am not as a big time churner as some others here but already in the last month i got denied by 2 credit unions that offered high interest because of too many chex systems inquires. I also do not believe they will let us choose what info that they will use. Already we are not able to be decide what info gets looked at and in fact we have to actually pay to get a copy of our credit report to see what out credit report actually says (not including the free annual report or reports based on credit denials).
I see no advantage for consumers for this “SUPERFICO”!!!

“we have to actually pay to get a copy of our credit report to see what out credit report actually says (not including the free annual report or reports based on credit denials)”

Sites like Credit Karma are a way around that, FWIW.

and you should NEVER use nor support operations like Credit Karma, as they are in the business of taking and harvesting all your data — information they wouldn’t otherwise get access to — and selling it to anyone willing to pay. It’s in their privacy policy and was included in their last privacy policy change sometime last year (or so).

They don’t stand to gain by offering “free services” — they want data about you to monetize, onto of $ they make from credit card affiliate links.

As a churner, I want my data to be sold/traded/given to anyone and everyone with a card to offer.

I use credit karma, credit sesame, creditwise, credit journey, etc etc, they give you an estimated score. The article claims we will be able to choose what info others see. That’s what i disagree with. right now you have little control over what is on your credit report unless it is old or incorrect info.

I’m not a fan of this idea either, especially if every institution sends in your balance, so than any company can pay for this info to see how much cash you have sitting around. What happens when that info gets hacked (again?)
And that would probably also hurt anybody with good credit; if you use cash for a lot of transactions, bank’s can’t skim off of that by charging you interest, as interest is obviously where they make their money.
I had a perfect 850/850 up until I paid off one of my installment loans. Then I dropped ~30 points and could not recover, despite nothing else changing one way or the other. A higher score indicates a good borrower. Key word: BORROWER. If you borrow, then they are making money off you. If you don’t borrow, you’re using cash, and there isn’t much money to be made there.
But I guess they kind of like you having a large cash balance because they can then loan it out, but they’re not making up to 29.99% off it, with other fees on top of it.
But on the upside: Chase will now be giving us a hand by extending the average age of your accounts :-/

“It seems strange that the loan applicant gets to choose which checking accounts are considered, if you have overdrawn from an account before then you’d obviously want to exclude that account.”

It sounds like the target market for this is not going to be high-income churners with a bunch of bank and CC accounts. I’d expect the vast majority of the country only have 1 checking account, and it’s probably much rarer for people with low credit scores to have multiple checking accounts; that demographic is probably more likely to have none at all (‘unbanked’).

I like it. It’s pretty ridiculous that I don’t have an amazing credit score despite 20 years of perfect payment history with dozens of CCs and 100K+ income. I’m penalized for not having any mortgage or car payments (both are paid for). Friends who have less money and income have a higher score because they have a more diversified payment mix? Like seriously WTF? I’d love if it lenders could see that I have $50K in my bank account.

It just means that actually paying a variety of loans is a better predictor of credit worthiness than having a bunch of money. The key thing to remember is it’s just a basic math model and not “the truth”

There are some easy ways to increase your diversified revolving credit mix that cost only a few dollars worth of interest. You can get a personal loan thru a credit union (even $500 will work), pay it down to 9% of the balance or even less (maximum score boost at <= 9%), then do automatic payments for the balance over the full term of the loan (so you get the score bump as long as the loan is open).

I saw first saw the technique discussed on MyFico forums:

Agreed Mike. What you said is exactly me. I would have expected my credit score to be a solid gold 850. 20 years credit history, not a single late payment. Today could max out every open CC card and pay it off in cash tomorrow. Credit score about 780. A sham.

When I see and read about the various credit and bank account scoring methods, I think back to when I was a kid and my dad would make me buy him the “Daily Racing Form”. In most cases, the numbers in these reports still does not predict whether or not you will be approved for an account; it’s just statistical mumbo-jumbo.

Great to find out my checking account history is being sold to FICO….so much for “consumer protections”

Just let your memes come true
Just let your memes come true

Dave Ramsey must be joyous to the moon

rip his “0” credit score.

Wow, this is really scary! When Equifax got hacked and your social and account numbers were exposed, I do not think that checking information was included.
If it was, what would keep those that got access to this to sort by the highest balance and proceed to try to socially hack or brute force your bank account and draw out the money?? Yes, your money is insured but have you recently had to file a claim?? It could take a month or so to get issues resolved.

For the Love of God and All that is good and decent….Please… I am Begging you…please… get a CLOSER LOOK AT THIS ULTRAFICO Con Job and Get the Word out.
The list of nasty people ( and Organizations ) that would LOVE for All of us to Freely give UNFETTERED ACCESS to ALL of our day to day transactions is ENDLESS. Think about it…. do you Really want everyone on Planet Earth to have Free and full access to ALL your Monthly Bank Statements ???
ULTRAFICO is the Wholesale Slaughter of that Final piece of YOUR PRIVACY. PLEASE….GO ask an Actual Criminal if he ( or she ) would like to have UNFETTERED ACCESS to your ( and everyone’s ) Monthly Bank Statements. Then be prepared to administer CPR when the Actual Criminal falls down laughing with Glee and Cannot even Catch their breath.
Someone PLEASE !!!! SOUND THE ALARM on Social Media to prevent This Nightmare…. this EVIL Final Invasion of PRIVACY !!

Lenders are still stuck by as far back as FICO 04. We probably still have a lot of time until these new scores go mainstream.

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