4 Million People Will Receive An Early Xmas Present
OMG you guys Christmas is coming early. A lot of you may see your credit scores rise a bit today from FICO, a leading credit scoring company. FICO, Experian, and Finicity announced a new pilot program that will consider how you manage your cash that could move credit scores higher.
Why is this big news? Because credit scores are so important when it comes to qualifying for a mortgage and getting the lowest rates. Getting the lowest rates means saving thousands of dollars in the long run.
The program, called UltraFICO score, intentions are to help people with dings on their credit histories to also have their banking activity factored into their score. One example, it could include how long accounts have been open and any evidence of savings on your behalf.
If you’re in the upper 500s or lower 600s and or have limited history or previous financial problems, you my friends will benefit the most. With this new system, your scores could go way higher…ok maybe not skyrocket but it will increase.
David Shellenberger, the senior director of scores and predictive analytics at FICO, told CNBC. Nearly 4 million consumers could potentially see an increase of 20 points or more in their FICO score, he says. “We’ve found a new way to use consumer-permission data that allows lenders to make better decisions and helps consumers gain access to credit,” says Alex Lintner, the president of consumer information services at Experian.
But not all in the financing industry think that finding ways to boost credit scores are a smart move in opening the door to more credit card or mortgage approvals. “While this generally sounds like a good thing for consumers, the concerning part—the solution in search of a problem, if you will—is the focus on boosting approvals,” Ted Rossman, CreditCards.com’s industry analyst. “Going in with the idea of increasing approval rates is a slippery slope.”
The UltraFICO score is slated to be available to lenders by mid-2019.
So yes, some are concerned because we definitely don’t want to repeat 2007-2010 crises but that was a whole different time and a lot more was factored into that mess. Right now, there are strict rules when applying for a mortgage, you have to show proof of income and money in your bank account. So, having an increase in your credit score could be a great thing if you’ve been thinking about buying a house. This could be your chance to take the initial steps into becoming a homeowner. Whenever you’re ready, I will be here for you.
As always, thank you for reading, I appreciate your and your time.
Your favorite REALTOR®
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