New Type of Credit Score aims to widen pool of Borrowers

The bad thing with credit is you only get one shot at it. Your credit score is easily one of the least forgiving figures in the world, as it can take years to build and develop a strong score, and just a few bad decisions and years to completely ruin it. Then, climbing out of that pit can represent a long and troubling journey.

The good news? There is a new type of credit score that is looking to serve as a second chance for individuals with a poor credit score.

Understanding Your Credit Score

Are you having trouble qualifying for a new car loan? Do you worry about the day you go to apply for your dream first home only to get declined? These concerns are closely linked to a poor credit score which is the most common reason that people do not get loans accepted.

Your credit score is a three-digit number that lenders use to evaluate your ability to repay a loan. The higher the number, the better.

  • Excellent Credit Score = 720 or higher
  • Fair Credit Score = 660 to 719
  • Poor Credit Score = 620 to 659
  • Bad Credit Score = 619 or lower

Credit scores are based on a borrower’s history of repaying mortgages, loans and credit card balances. Lenders report this history to the big credit bureaus — Experian, TransUnion and Equifax — who then use formulas from FICO to calculate a credit score.

The problem is, once that credit score gets damaged, or you are young and haven’t built up credit yet, it is impossible to demonstrate to lenders that you are a responsible and reliable person as lenders typically rely so heavily on a credit score.

Fair Isaac Corporation, the creator of the FICO credit score system, announced late in 2018 that it would test a new score that is focused more on a borrower’s bank account balance(s) and cash management behavior, as opposed to history with credit cards and other types of loans.

It was a gigantic announcement as it offered hope for people that have sunk into a pothole in regards to their current credit score, or for younger people that have yet to build up a reputable credit history.

Fair Isaac Corporation has labeled this new prototype UltraFico.

Expected to arrive later this year, UltraFico will be an alternative for people with a poor credit history or have yet to establish a solid foundation yet need some type of loan. The “second chance” credit score will be targeted primarily for individuals with a score in the low 600s or upper 500s, also known as the “subprime” group according to lenders because they are not considered ideal candidates for new loan approvals.

How do you qualify for an UltraFico Score?

The official website of the new credit score program is available at You can get all the details about the score and how you will need to grant permission for the lender to be able to access and collect information from your personal bank accounts as well as cash management habits.