UltraFICO & Experian Boost ... Good Solutions to Your Credit Challenges?

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
https://activerain.com/droplet/5jLW

  

 

UltraFICO & Experian Boost 

Good Solutions to Your Credit Challenges?

 

 

Ever since the announcements regarding the new credit scoring systems "UltraFICO" and "Experian Boost" were made last year (and their subsequent implementation earlier this year), questions regarding their use, legitimacy, accuracy, and abilities have come my way ...  

 

In most instances, the questions come from those considering home buying or refinancing but suffering from credit scores considered "fringe" or low scores ... either as a result of NO/little credit or credit issues having occurred.  They're looking for answers and fixes for the challenges they face.

 

And challenges do exist.  While  FICO reports that, for the first time since tracking these stats, the average national FICO Score has reached the 700 threshold (in actuality, 704, an increase of around 10 points above the score reported prior to the housing recession that began in 2006), credit remains of great concern for many home buying prospects.  

 

Why? 

 

Prospects know credit scores will weigh heavily in their upcoming mortgage search.  They will dictate what mortgage options are available to them, what mortgage costs they'll face, the interest rate offered, and ultimately ... Mortgage Approval itself.  So opportunities and methods to increase credit scores are obviously of great importance and interest.

 

Along comes UltraFICO and Experian Boost.  They've caught these hopeful homebuyers' attention, as each declares they have the ability to establish or raise credit scores for their customers.  But can they truly deliver on their promises?  Let's do some examining ... 

 

Below is some information you should have at your disposal prior to making a decision to use their services or not:

 

With UltraFICO ... 

  • UltraFICO is a free service
  • UltraFICO influences Experian-based Credit Scores only
  • Customers must "opt-in" to UltraFICO
  • Clients link their Checking, Savings or Money Market Accounts (customer choice) to the service  
  • To link and access their banking info/data, customers must use Finicity (an account aggregation company/app
  • The account data/info chosen by the customer contributes to their UltraFICO score  
  • UltraFICO only works with certain FICO algorithms

What UltraFICO considers during its scoring: 

  1. Evidence of customer's consistent Cash on Hand
  2. History of positive account balances
  3. Length of time customer's Account(s) have been open 
  4. Recency/Frequency of client's Bank Transactions

  ... or basically, a client's "money habits".  

It's important to point out:  An UltraFICO Score does NOT replace a FICO Score.  

 

With Experian Boost:

  • Experian Boost is a free Experian service
  • Customers must "opt-in" to Experian Boost, which means they must sign up for an Experian account 
  • By opting-in, customers agree to let Experian connect to their online bank account to track the utility and telecommunication bill payments they choose  
  • Finicity must be used for Experian Boost to access account info/data
  • Experian Boost influences Experian-based Credit Scores only
  • Signing up for Experian Boost gives you free access to your FICO Score from Experian (not Equifax or TransUnion)
  • When "opting-in", customers grant permission to Experian Boost to seek online banking data/info on:
  1. Telecommunications Payment Data       
  2. Utility Bills Payment Data

   ... in both cases, the customer must confirm the data received.

     

Sounds great, doesn't it?  Well yes, maybe, and no ...

 

For those seeking to establish credit or repair severely damaged credit, these two credit-boosting services may serve a purpose.  (Although as a Mortgage Originator, I maintain that credit can be easily established or repaired via other methods.  See below. 

 

For those that find themselves in these scenarios and also thinking of utilizing either service, remember to always ask the following before applying for any new credit, "Do you report to the Credit Bureaus?" 

 

Your goal is to have that new credit reflected in your Credit Report, so proceed with any new credit application according to the answer you receive.  (Pass on applying if they cannot answer this question definitively.)  If you decide to move forward with an application, be aware that your new credit will typically start to show on your credit report within 30 days of the close of the account's billing cycle.   

 

Now it's important to point out at this time:  Differing algorithms and scoring models for credit scoring exist.  Debt.org reports that FICO alone "has more than 50 different versions of your score that it sends to lenders. The score may change, depending on what company asks and what was important to that company in calculating your score".  Other models exist too. 

 

Scoring models, such as VantageScore and Community Empower, and are also being used by companies.

 

That's a lot of information to digest.  But what does it all mean for consumers?  

 

Well first, it means the credit score that you receive from your credit card company ... (think Discover, Visa, etc.) can be quite different than the credit scores received and used by your bank for an auto loan.  Different scoring models reap different credit scores. 

 

And let's go a few steps further.  The credit scores referred to in the above paragraph?  Those credit scores can also be different from those utilized by your insurance company, telecommunication, and utility companies, etc.   And they're all going to be different than those used by most mortgage lenders, as that algorithm and scoring model is specific to the mortgage industry alone. 

 

While doing some research for this article, I ran across a statement regarding Experian Boost, made by the Experian credit bureau themselves.  I thought it pretty interesting and revealing.  

 

In that statement, Experian said, Only positive payment histories will be aggregated through the (Experian Boost) platform and consumers can remove the new data at any time.”  

 

In other words, customers choose the accounts they want to link and report to Experian Boost.   It's only natural to assume that customers will choose only those accounts that reflect well on their finance/credit choices and ultimately on their Credit Scores.

 

But Mortgage Lenders want and require a more complete and thorough picture of an applicant's credit at the time of their mortgage application and underwriting.  That means negative info along with positive info must be received and vetted.  

 

To that end, Mortgage Lenders typically request what is called a "tri-merge credit report" or Residential Mortgage Credit Report (RMCR) for mortgage applicants.   This tri-merge report takes the data provided by the three (3) major credit bureaus  (Experian, TransUnion, and Equifax) and merges it into one single report.  That report provides a thorough and detailed picture of the applicant's entire credit history including their credit habits and how they've utilized their credit in the past.  

 

Currently, neither UltraFICO nor Experian Boost is acknowledged by all algorithms, including that used by Mortgage Lenders.  That's a big problem for those hoping to buy and finance (or refinance) a home now or in the future. 

 

So what should you do if you're in need of reliable credit info or assistance?  If you hope to establish or improve your credit scores?  

 

The answer is fairly simple:  Seek the guidance and assistance of an experienced mortgage lender. 

 

Doing so is a wise decision whether your goals include home buying or not, as a mortgage lender can provide you sound timely advice that will help you establish and/or improve your credit and credit scores both in the short and long term.  And best of all, their service is typically provided at no charge.  

 

I think it's never a bad thing for anyone to seek information and opportunity to improve upon their finances or credit scores.   I applaud that heartily.

 

But until the benefits reaped from UltraFICO and Experian Boost are more inclusive to a wider range of credit scoring models and algorithms, neither may provide the results a consumer really needs or is ultimately hoping for ...

 

 
 
*  Hoping to establish good credit? Have credit questions? 
 
Or are you dreaming of buying or refinancing a home or Investment Property in New Lenox - Will County - Chicagoland - IL/WI
 
Contact me today!  I'll put my 40 years of mortgage experience and expertise to work on your behalf.  
I'm easily found at: 
 

Gene Mundt
 
Mortgage Originator  -  NMLS #216987  -  IL Lic. 031.0006220  -  WI License #216987
 
American Portfolio Mortgage Corp.
 
NMLS #175656
 
 
Direct:  815.524.2280
Cell:  708.921.6331
eFax:  815.524.2281
 
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

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Re-Blogged By Re-Blogged At
Topic:
Lending / Financial
Location:
Illinois Will County New Lenox
Groups:
Realtors®
Home & Credit Savvy
1st Time Buyers
Bananatude
WillCounty
Tags:
establishing credit
credit bureaus
homebuying
credit repair and improvement
ultrafico
experian boost
finance education tips

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Rainmaker
3,213,911
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

LOTS of credit worthy information here Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi  and we do work with people all the time in divorce and for other reasons who need a "BOOST" !

Jun 21, 2019 10:23 AM #1
Rainmaker
1,295,023
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Wow... Gene. I need to bookmark this to come back to! 

Jun 21, 2019 11:19 AM #2
Rainmaker
1,872,146
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good afternoon Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi -  there is certainly plenty of information here and buyers do need advice on how to sort it out. 

Jun 21, 2019 11:51 AM #3
Rainmaker
4,358,975
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Gene,

Bottom line, it seems so much easier to just pay your bills one time, don't overspend instead of going through all this rigamarole.  And the other thought I have is to seek out someone like you who can properly advise.  A

Jun 21, 2019 12:33 PM #4
Rainmaker
1,161,662
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Wow, what an in-depth, informative post, Gene. I always learn so much from you.

Jun 21, 2019 01:56 PM #5
Ambassador
1,914,623
Hannah Williams
Re/Max Eastern inc. - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-953-8818

Great explaination on the new Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi  I have a better understanding of  how it is done 

Your post is Featured in 

Bananatude 

bananatude

Jun 21, 2019 07:57 PM #6
Rainmaker
2,481,460
Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

I need to read your blog more often, so I can understand how credit works better.  Recently I looked at my scores and they were all good, but Experian and Equifax showed my score at the same level, but TransUnion was 40 points lower, haha.

Jun 22, 2019 06:58 AM #7
Ambassador
1,822,833
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

This is certainly a comprehensive look at these options. I'm with Alexandra, learning to be responsible with money and making good financial decisions is pretty key to become a mature human being. With that said, I understand things can go awry. I too would rather talk to someone in person ( You), than opt for one of the credit boosting programs. 

Jun 22, 2019 08:08 AM #8
Rainmaker
3,017,451
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Good morning, Gene... a masterful explanation... I think I earned a college degree in credit reading this today!

Jun 22, 2019 08:21 AM #9
Rainmaker
1,980,729
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi - I think College Students could benefit if you taught at their schools or did webinars for this age group. The sooner one learns, the more likely they may be in future years when it really counts! 

Jun 22, 2019 09:31 AM #10
Rainmaker
2,742,370
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Everybody just do your research before you jump into this. A lot of it does work pretty well, but just be careful.

Jun 22, 2019 03:39 PM #11
Rainmaker
2,742,370
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi I have a friend who always used to say that there should be financial literacy classes in 12th grade before you can even graduate. That might be a good idea!

Jun 22, 2019 03:40 PM #12
Rainmaker
1,822,647
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Wow thanks for the update ! FICO Scores have become more confusing .

Jun 23, 2019 05:39 AM #13
Rainmaker
700,186
Richard Bazinet /MBA, CRS, ABR
West USA Realty - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Thank you Gene, a good read. Certainly, this update was needed. A good reminder by same for folks to pay their bills on time.

Jun 23, 2019 06:14 AM #14
Rainmaker
615,399
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
Raleigh - Cary Triangle Real Estate 919-602-8489

Gene, Thank you for the details. It sounds like it is quite confusing for the consumer. These companies have access to financial data makes me wonder what could happen if there's a  breach. I certainly hope they have some guarantees for the consumer should that happen. 

Jun 23, 2019 06:16 AM #15
Rainmaker
2,435,791
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Why reinvent the wheel? Many years ago I said: Gene the mortgage machine Mundt and here he is steady as he goes.....

Jun 23, 2019 06:40 AM #16
Rainmaker
480,997
Bruce Kunz
C21 Solid Gold Realty, Brick, NJ, 732-920-2100 - Howell, NJ
REALTOR®, Brick & Howell NJ Homes for Sale

Thanks for this very information article, Gene. Putting on 'rose color glasses' isn't much of a fix... As you and others have said, the best way to have a good credit history is to spend wisely and pay on time.
Bruce

 

Jun 23, 2019 07:17 AM #17
Rainmaker
661,461
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

Good credit is very important...not only for a mortgage...for many reasons. You have provided great information, Gene. The bottom line is that it is best to maintain good credit because there is no quick fix if credit is damaged.

Jun 23, 2019 05:47 PM #18
Rainmaker
1,517,838
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

Pretty hefty post with lots to absorb. I had heard that there will be a 'notation' of sorts on the new credit saying it was 'self reported' or some such. So in other words it will be flagged. 

I think that the day has come for everything to either be on the report or nothing. I've got lots of things that are not on there & it really irks me. 

Jun 24, 2019 11:37 AM #19
Rainmaker
5,310,533
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much, Gene, for sharing your experience and your advice.

Jul 07, 2019 01:13 PM #20
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Rainmaker
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