Payment history used to be the main factor for credit scores. Today, the introduction of the UltraFICO creates a score that also includes assets and income. This could put homeownership within reach for more of your clients.

Limited Customers

With close to 80 million Americans scoring below 680 for their FICO scores and 50 million more without data to form a score at all, lenders and borrowers are missing out. Access is limited to home and car ownership for consumers. This means there are fewer customers qualifying for lenders and originators that is limiting business in this industry.

Using a more predictive formula with the UltraFICO score will help more accurately address risk. This will open doors for more consumers while offering a new client base to mortgage originators.

Customer Permission

Data can now be accessed with customer permission to verify assets and income. With additional data, it is easier to assess a borrower’s financial health. Even those without a credit profile or who are trying to rebuild their credit rating will have a better chance of proving they can manage a mortgage.

Pilot Program

The new UltraFICO score is only a pilot program available through a few select lenders. However, the potential for it to become a new standard to assess mortgage applicants will be of benefit to the mortgage industry.

The new score allows borrowers to not only qualify but maybe even find better terms. According to Scotsman Guide, the new score could improve credit scores for about 40% of consumers. It can also bring their scores up by 20 or more points.

Higher Scores

Scotsman also showed seven out of 10 consumers saw a higher UltraFICO than their FICO scores if they showed sound financial behavior in their checking and savings accounts. Not only does this help consumers improve their credit scores, but it also provides access to the funds to help them own a home.  

Lenders will also have advantages thanks to the UltraFICO score. The national credit scoring system allows them to review information that will provide insight to be more precise in scoring. You can better assess risk to make more profitable decisions.

Improvements to Pilot

Throughout the pilot period, participants will have the opportunity to look for ways to improve the process. By improving issues that could pop up once the program is national, support from lenders will be stronger.

Before it is made available to all lenders and mortgage originators, approval will be required from regulators and the government-sponsored enterprises (GSEs). As well, the Federal Housing Finance Agency is also looking at possible new regulations for the GSE’s credit-scoring model. It has its own pilot process to test new scoring innovation, which will work well for the UltraFICO score.

Financial Inclusion

Financial inclusion can finally be something more consumers enjoy. Some of those most likely to gain from the new score include millennials, new citizens and those with poor credit scores.

Access to loans for the biggest life investments will be available to more consumers, while mortgage originators will have a more precise decision-making tool sure to open up new business opportunities.  

Acuity: the preferred partner of lenders all over the country 

At Acuity National Real Estate Solutions, we are dedicated to providing top quality title services to lenders and brokers across the country.

As a lender, you need a title partner who can keep pace with your customer demand, both geographically and from a transactional volume perspective. We offer the technological systems to scale to fit the needs of all our clients. Our team of title professionals are experts in the many types of mortgage transactions. We will provide the services you need to keep your operations on track. 

Call Acuity National Real Estate Solutions today at (502) 238-7500 to find out about how we can help you close your loans quickly and efficiently.

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