Some new and exciting changes are being done to the way credit scores are decided. Fair Isaac, Corp., otherwise known as FICO, has announced a new score measuring system that will be known as UltraFICO and will be rolling out early 2019. The new system could help many people qualify for loans that would have been denied otherwise.

Currently, there are two versions of FICO used, the 8 and the 9, though the most commonly used, and widely known, is the 8. The new version will not do away with the old, but rather will act as a way for lenders to offer a recalculation of a person’s score to give him/her another chance at qualifying. The Wall Street Journal has reported that UltraFICO “is designed to boost the number of approvals for credit cards, personal loans and other debt by taking into account a borrower’s history of cash transactions, which could indicate how likely they are to repay.”

For the most part, UltraFICO is intended to raise scores of people who do not have a long credit history to increase loan qualification, however the same way in which a score can be increased it can also drop a few numbers. “The new way of calculating credit scores takes into consideration the amount of money in your checking/savings accounts, over-drafts, and other transactions to potentially boost score.” So, if a person has had many overdrafts and other harmful transactions their score could suffer. The good news is that the traditional methods of measuring scores will still be available so that lenders can use the one that is most helpful to the borrower.


Written By Catalina Rodriguez, Fall Law School Intern