The Fair Isaac Corporation (better known as FICO) recently introduced its new credit score model, and obviously it’s attracting a lot of attention from mortgage industry experts. Only time will tell if this new model will revolutionize the lending industry or if it will fail.


They’re calling it UltraFICO. In theory, it has the potential to increase FICO scores for millions of consumers. However, it is dependent on the consumers choosing to opt in by “building their own credit score” and giving permission to credit agencies to access their bank records.

After the permission is obtained, then FICO, Experian and Finicity coordinate a review of the applicant’s financial standing. They look at the credit file, and then also analyze how someone manages their personal finances. It’s a more comprehensive—yet also intrusive—method that will help determine a more appropriate credit score for a borrower.

Advantages & Disadvantages

FICO believes the new UltraFICO rating will increase homeownership because it should typically boost the credit scores of applicants—especially those who currently have relatively thin credit files. In other words, maybe someone doesn’t have a lot of consumer credit accounts, but they are smart with their money. By looking at personal finance habits in addition to credit history, UltraFICO should identify that they are a good candidate for a loan.

Other applicants who may benefit include people who may have previous marks against them but who are clearly working to improve their score. FICO representatives argue that increasing the data reviewed in a credit rating review is a better approach to boost homeownership compared to simply lowering the lending standards to attract more people with lower credit scores.

UltraFICO may end up boosting the credit scores of roughly four million consumers by about 30 points on average. This may not seem like much, but it may be the difference for those borrowers who are right on the borderline of being approved for a loan or not. This new system should provide a more predictive score to lenders and allow them to approve loans with more confidence.

“We have found there is a high correlation between personal finances and ability to repay,” says Joanne Gaskin, FICO Senior Director.

Overcoming Obstacles

One big obstacle for UltraFICO is that it could only be used in the non-qualified mortgage space unless the Federal Housing Finance Agency (FHFA) approves it to be used in the qualified mortgage space. Qualified mortgages are protected by federal government regulations. They are continually reviewing various new credit models, but any final decisions on this particular model continue to be pushed back. Only time will tell.

Consumers could be a little wary of this new system, as well, especially given the major Equifax hack that happened in 2017 and some other violations by major credit agencies. Providing more access to personal finance records could be a concern for some, even if the trade-off may mean the difference between qualifying for a mortgage loan or not.

It may be some time before qualified mortgages will use the UltraFICO system, but it is still interesting to see what credit agencies are trying to do in order to change the way credit scores are achieved. It’s nice to know they are always pushing the envelope and seeking alternative ways to help more people get approved for home loans.

What do you think about the UltraFICO idea? Let me know. I’ll be happy to answer any mortgage questions you have. Call me at (619) 929-0199 or email me at



Beau Hodson

Beau Hodson

About the Author Since 2003, Beau has been a mortgage professional and is a leading mortgage broker and lender in San Diego. As Founder and Senior Mortgage Advisor at Transparent Mortgage, he is truly committed to serving the needs of his clients and raising industry standards for integrity and transparency.