Are UltraFICO & Experian Boost Solutions For Your Credit Challenges?

Are UltraFICO & Experian Boost 

Solutions For Your Credit Challenges?

Ever since the announcements regarding the new

credit scoring systems "UltraFICO" and "Experian 

Boost" were made last year (and their subsequent 

implementation earlier this year), questions regarding their 

use, legitimacy, accuracy, and abilities have come my way ...  

In most instances, the 

questions come from 

those considering 

home buying or

refinancing but

suffering from credit 

scores considered 

"fringe" or low scores 

... either as a result of 

NO/little credit or credit issues having occurred.  They're 

looking for answers and fixes for the challenges they face.

And challenges do exist.  While FICO reports that, for the

first time since tracking these stats, the average national 

FICO Score has reached the 700 threshold (in actuality, 704, 

an increase of around 10 points above the score reported 

prior to the housing recession that began in 2006), credit 

remains of great concern for many home buying prospects. 

Why? 

Prospects know credit scores will weigh heavily in their

upcoming mortgage search.  They will dictate what mortgage

options are available to them, what mortgage costs they'll

face, the interest rate offered, and ultimately ... Mortgage 

Approval itself.  So opportunities and methods to increase

credit scores are obviously of great importance and interest.

Along comes UltraFICO and Experian Boost.  They've

caught these hopeful homebuyers' attention, as each declares 

they have the ability to establish or raise credit scores for 

their customers.  But can they truly deliver on their

promises?  Let's do some examining ... 

Below is some information you should have at your disposal

prior to making a decision to use their services or not:

With UltraFICO ... 

• UltraFICO is a free service
• UltraFICO influences Experian-based Credit Scores only
• Customers must "opt-in" to UltraFICO
• Clients link their Checking, Savings or Money Market Accounts (customer choice) to the service  
• To link and access their banking info/data, customers must use Finicity (an account aggregation company/app) 
• The account data/info chosen by the customer contributes to their UltraFICO score  
• UltraFICO only works with certain FICO algorithms

What UltraFICO considers during its scoring: 

1. Evidence of customer's consistent Cash on Hand
2. History of positive account balances
3. Length of time customer's Account(s) have been open 
4. Recency/Frequency of client's Bank Transactions

  ... or basically, a client's "money habits".  

It's important to point out:  An UltraFICO Score does

NOT replace a FICO Score.  

With Experian Boost:

• Experian Boost is a free Experian service
• Customers must "opt-in" to Experian Boost, which means they must sign up for an Experian account 
• By opting-in, customers agree to let Experian connect to their online bank account to track the utility and telecommunication bill payments they choose  
• Finicity must be used for Experian Boost to access account info/data
• Experian Boost influences Experian-based Credit Scores only
• Signing up for Experian Boost gives you free access to your FICO Score from Experian (not Equifax or TransUnion)
• When "opting-in", customers grant permission to Experian Boost to seek online banking data/info on:

1. Telecommunications Payment Data       
2. Utility Bills Payment Data

   ... in both cases, the customer must confirm the data

received.

     

Sounds great, doesn't it?  Well yes, maybe, and no ...

For those seeking to establish credit or repair

severely damaged credit, these two credit-boosting

services may serve a purpose.  (Although as a Mortgage 

Originator, I maintain that credit can be easily established 

or repaired via other methods.  See below.)  

For those that find themselves in these scenarios and also

thinking of utilizing either service, remember to always ask 

the following before applying for any new credit, "Do you 

report to the Credit Bureaus?" 

Your goal is to have that new credit reflected in your Credit 

Report, so proceed with any new credit application according 

to the answer you receive.  (Pass on applying if they cannot 

answer this question definitively.)  If you decide to move 

forward with an application, be aware that your new credit 

will typically start to show on your credit report within 30 

days of the close of the account's billing cycle.  

Now it's important to point out at this time:

Differing algorithms and

scoring models for credit 

scoring exist.  Debt.org 

reports that FICO alone "has

more than 50 different

versions of your score that it

sends to lenders. The score

may change, depending on

what company asks and 

what was important to that

company in calculating your 

score".  Other models exist too.  Scoring models, such as 

VantageScore and Community Empower, and are also 

being used by companies.

That's a lot of information.  But what does it all mean for

consumers?  

Well first, it means the credit score that you receive

from your credit card company ... (think Discover, Visa, etc.) 

can be quite different than the credit scores received and 

used by your bank for an auto loan.  Different scoring models 

reap different credit scores. 

And let's go a few steps further.  The credit scores referred to 

in the above paragraph?  Those credit scores can also be 

different from those utilized by your insurance company, 

telecommunication, and utility companies, etc.   And they're 

all going to be different than those used by most mortgage 

lenders, as that algorithm and scoring model is specific to

the mortgage industry alone. 

While doing some research for this article, I ran 

across a statement regarding Experian Boost, made by 

the Experian credit bureau themselves.  I thought it pretty 

interesting and revealing.  

In that statement, Experian said, “Only positive payment 

histories will be aggregated through the (Experian Boost) 

platform and consumers can remove the new data at any 

time.”  

In other words, customers choose the accounts they want to

 link and report to Experian Boost.   It's only natural to 

assume that customers will choose only those accounts that 

reflect well on their finance/credit choices and ultimately on 

their Credit Scores.

But Mortgage Lenders want and require a more

complete and thorough picture of an applicant's credit at the 

time of their mortgage application and underwriting.  That 

means negative info along with positive info must be

received and vetted.  

To that end, Mortgage Lenders typically request what is

called a "tri-merge credit report" or Residential Mortgage 

Credit Report (RMCR) for mortgage applicants.   This tri-

merge report takes the data provided by the three (3) major 

credit bureaus  (Experian, TransUnion, and Equifax) and 

merges it into one single report.  That report provides a 

thorough and detailed picture of the applicant's entire credit 

history including their credit habits and how they've utilized 

their credit in the past.  

Currently, neither UltraFICO nor Experian Boost is

acknowledged by all algorithms, including that used by 

Mortgage Lenders.  That's a big problem for those hoping to 

buy and finance (or refinance) a home now or in the future. 

So what should you do if you're in need of reliable credit info

or assistance?  If you hope to establish or improve your 

credit scores?  

The answer is fairly simple:  Seek the guidance and 

assistance of an experienced mortgage lender. 

Doing so is a wise decision whether your goals include home 

buying or not, as a mortgage lender can provide you sound 

timely advice that will help you establish and/or improve 

your credit and credit scores both in the short and long 

term.  And best of all, their service is typically provided at no 

charge.  

I think it's never a bad thing for anyone to seek information

and opportunity to improve upon their finances or credit 

scores.   I applaud that heartily.

But until the benefits reaped from UltraFICO and 

Experian Boost are more inclusive to a wider range of credit 

scoring models and algorithms, neither may provide the 

results a consumer really needs or is ultimately hoping for ...

 

 

*  Hoping to establish good credit? Have credit questions? 

 

Or are you dreaming of buying or refinancing a home or Investment Property in New Lenox - Will County - Chicagoland - IL/WI? 

 

Contact me today!  I'll put my 40 years of mortgage experience and expertise to work on your behalf.  I'm easily found at: 

 

Gene Mundt

 

Mortgage Originator  -  NMLS #216987  -  IL Lic. 031.0006220  -  WI License #216987

 

American Portfolio Mortgage Corp.

 

NMLS #175656

 

 

Direct:  815.524.2280

Cell:  708.921.6331
eFax:  815.524.2281

gmundt@goapmc.com

www.genemundt.com

 

          

 

       

Gene Mundt, Mortgage Originator, an Originator with 40 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in
Chicago and the greater Chicagoland region, including: 
The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI.  

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