Easter Seals Greater Houston is proud to offer our housing, financial literacy and down payment assistance programs. The program has closed on over 120 houses in the past ten year with no defaults ever. Our staff pride themselves on their knowledge, educational programs, THRIVE access, their ability to tap into city/county funds and resulting success rates. Information that affects your FICO score is always important and Katy Thorstenberg, Program Coordinator with the Easter Seals Greater Houston Financial Literacy and Housing Initiative, gets the method behind the madness as she explains here.
Move over, old FICO – there is a new credit-scoring model in town. ULTRAFICO is being rolled out and will soon be an option for lenders to use in assessing credit risk of their would-be borrowers. After reading through the changes and trying to figure out the ‘this affects-me how’ piece, one revision pops out. With the consumer’s consent, the ULTRAFICO model would allow the lender to actually take a one-time peak into the applicant’s bank accounts. The lender would be able to see how you manage your cash flow; i.e., do you maintain a comfortable balance in your accounts, or do you show a periodic bouncing of checks or overdrafts?
If you have established a history of responsible cash management over time, you will benefit from higher scores. If you don’t, you won’t. You might ask if ULTRAFICO will be a game changer when it comes to world of credit/lending. After all, the present FICO scores already reflect how you pay your bills – on time – late, or never – and are scored accordingly. The answer is not a big boost to many of us who have been around awhile building a credit history through loans, credit cards and general living. However, to those who have not yet enjoyed credit card spending and taking on an assortment of loans from personal to car to lines of credit, ULTRAFICO may add points to those individuals, dubbed “credit invisibles”, now another name for millennials. In a CBS news report by David Shellenberger, senior director of credit scores and predictive analysis at FICO cited “40% of applicants would see an upward shift of 20 points or more in their credit score”. Of course, scores might track downward as well. Invisible or not, at the end of the day, you just cannot get away from the fact that DEBT and how you manage it matters.
Written by Kathy Thorstenberg, Program Coordinator of Easter Seals Greater Houston Financial Literacy and Housing Initiative