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Innovation usually results in disruption—and that isn't a bad thing, especially when it can help consumers. The past year saw a number of firsts for credit reporting and scoring. Two of the most significant changes came with the announcements of Experian Boost®ø and UltraFICO™ Score.
Both Experian Boost and UltraFICO™ take a new approach to credit scores by including data not previously used to calculate scores. The idea is to give consumers more control of their credit scores. How? By using these extra data points to help boost credit scores, which could in turn allow consumers to qualify for financial products or get better interest rates and terms.
Read on to learn about the differences and similarities between Experian Boost and UltraFICO™, and find out how each product can help you improve your credit.
What Is Experian Boost?
Experian Boost allows you, for the first time, to add your utility and telecom bill payment history to your Experian credit file, providing an opportunity for you to improve your credit profile. If you've been paying your utility and telecom bills on time, Experian Boost will factor that positive payment history into your credit file, which can often instantly improve your FICO® Score☉ .
The best part: You are in control. You can grant Experian permission to connect to your online bank accounts to identify utility and telecom payments. After you verify the payment data and confirm that you want it added to your Experian credit file, you'll receive an updated FICO® Score. The whole process can take as little as five minutes, and the resulting FICO® Score boost is immediate.
Experian Boost only considers positive payment information, so a late utility or phone payment will not affect your FICO® Score. And you can opt out of Experian Boost at any time.
What Is UltraFICO™?
With the UltraFICO™ Score, you can leverage your good banking behavior to enhance your FICO® Score. If you have a low FICO® Score or no score at all, then you have a chance to get an UltraFICO™ score based on the banking data you share. The UltraFICO™ Score is based on activity from your checking, savings or money market accounts that shows your responsible financial management. That information includes how much money you have in your account(s), how long you've had those accounts and how much you use them. And while this information doesn't appear on your credit report, it can be used to help improve your FICO scores.
Can Experian Boost and UltraFICO™ Work Together?
Lenders can use Experian Boost and UltraFICO™ to get the most informed understanding of a consumer's creditworthiness. Experian Boost provides lenders with additional payment history information, while UltraFICO™ provides lenders new analytics that incorporate consumer cash flow attributes into a new scoring algorithm. Both tools provide lenders with a more complete picture of a consumer's creditworthiness.
Experian Boost and UltraFICO™: Similarities and Differences
Here's a breakdown of Experian Boost and UltraFICO™ services and features:
|Opt-In?||Yes, consumers choose to opt in||Yes, consumers choose to opt in|
|Features||Allows consumers to add positive payment history to their credit file||Allows lenders to see consumers' positive banking account activity|
|How It Works||Through experian.com/boost, consumers can opt in to share their information, resulting in an updated FICO® Score||During the loan application process, lenders can ask consumers if they want to opt in and share their banking activity to get an UltraFICO™ Score|
|For How Long?||As long as you want to keep your payment history added to your Experian credit report. You can opt out at any time||As long as you want to include your banking activity in your score. You can opt out at any time|
|How Quickly Do Scores Change?||Consumers may see an immediate improvement||Once the lender adds the banking activity, consumers may see an improvement in their UltraFICO™ Score|
|Who Benefits?||Consumers with positive payment history and those with limited credit history or few credit accounts||Consumers with limited or previously problematic credit history who have positive bank account information|
|Why Use It?||Adding positive payment history gives more consumers an opportunity to get scored or improve their credit scores||Adding positive banking information allows consumers to improve their credit scores and become qualified for better rates and offers from lenders|
|Which Credit Bureaus Use It?||Experian||Experian|
The bottom line: Both products are about creating greater access to credit. Some consumers today don't have access because they don't have enough credit activity for lenders to assess. Experian Boost and UltraFICO™ help those consumers get credit for good financial management, giving them a better chance of reaching their financial goals.