Author: Mindy Leisure, Advantage Credit, Manager of Rescoring Services
Experian Boost™ and UltraFICO™ are two products offered by Experian® to help boost a borrower’s credit score. Please be aware that these products are only available with Experian so utilizing them will have no impact on a consumer’s TransUnion® or Equifax® scores.
Experian Boost allows a consumer to add payment history from accounts that do not report to the bureaus. These can be accounts for utilities, phone, and even streaming services like Netflix, but rent payments cannot be included through Experian Boost. Once a consumer signs up, they enter in all the required information and the positive payment history from these accounts will then be factored into the Experian score. Experian will pull the history from online bank accounts that the consumer utilizes.
UltraFICO is different in that it is actually an additional Experian Score. This score would best benefit a consumer who otherwise has no accounts that would generate a regular Experian score. This score is based on activity from checking, savings and even money market accounts. UltraFICO looks at “responsible financial management.” It does not just look at paying your creditors on time. It factors in the amount of money that is held in the accounts, the length of time they have been opened and how much they are utilized. Again, this does not boost or enhance a regular Experian FICO score but adds an additional score…which is called the UltraFICO score.
Both options are free to the consumer. Once a person gets signed up, they can stay on the programs for as long as they want, there is no time limit. Consumers can opt out of both programs at any time.
While both programs can be beneficial to some, there is a big “gotcha” of which people should be aware: Experian Boost only affects the FICO 08/09 scoring model. This model is used by some banks for auto loans and credit cards and depending on the bank may possibly include mortgages or HELOCS. However, both Fannie Mae and Freddie Mac do NOT accept this scoring model so the program will not affect the mortgage FICO models that are accepted by them. And the majority of mortgages go through Fannie and Freddie. UltraFICO is also not accepted by them.
While these programs are certainly a step in the right direction in helping consumers, right now they offer very little benefit to a consumer wanting to raise their mortgage FICO scores. The chances of programs like these ever actually helping scores are very slim as it would require completely refiguring the algorithms used with the older FICO models that are accepted within the mortgage industry.
When it comes to raising scores for the consumer wishing to purchase or refinance a home it is best to stick to the basics:
• Pay bills on time.
• Keep credit card balances low (below 10% of the high credit)
• Do not open new accounts (unless absolutely necessary)
• Do not close old accounts.