Good news, low credit holders. The Fair Isaac Corporation (FICO) has announced the coming of their new credit score calculation method, iconically named UltraFICO, for this spring.

While traditional credit scores are based off of payment history – a high score achieved by reliably paying bills in full and on time, month after month – UltraFICO is straying from the norm by ignoring payment history altogether and looking rather at the state of an individual’s bank accounts.

Analyzing transaction history through your checking or savings account, UltraFICO looks at how long you’ve had the accounts open, how well you spend and save money, how often you overdraft, and how much money you have.

And while the specifics are still in development, one thing’s for sure: this new calculation method could mean a better FICO score for millions of users.

According to estimations done by FICO and the Wall Street Journal, around 26 million bad credit holders could see an uptick in their score – 4 million of which a possible increase of up to 20 points – while over 7 million individuals without much credit history at all could see a better reflection of their creditworthiness through UltraFICO.

It’s easy to see why.

For those with a bad credit history, looking at a bank account could help improve their chances of securing a loan that otherwise might have been denied, while for those with little to no credit history at all – like millennials – UltraFICO could be a more time-efficient option over slowly building up a reliable credit score.

Looking to have your score recalculated by UltraFICO? Be sure the account you choose has:
• A balance of at least $400;
• No overdrafts in the past 3 months;
• A history of being open for a long time; and/or
• A large display of frequent transactions.

As with everything credit-related, the key lies in moderation and saving, so be sure to keep track of your spending habits now more than ever!

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