Low Credit Usage
According to recent research, only 33% of adults ages 18 to 29 have a major credit card.
This number may be surprising, however one reason this is so is that millennials are using debit cards overwhelmingly more frequently than credit cards. So, how does this play out for millennial credit scores?
Low Credit Scores
This lower incidence of credit card usage means that it can be difficult for millennials to build good credit scores. Without a good credit score, renting an apartment, getting a loan, or buying a car can be difficult. So, are those without credit cards just out of luck?
UltraFICO Credit Scoring
A new scoring system called UltraFICO, which debuted in 2018, offers a solution to this increasingly common issue.
Generally the consumer credit score FICO (an abbreviation for the Fair Isaac Corporation, the first company to offer a credit-risk model with a score) is based on credit card usage history. This is obviously difficult to develop for consumers who are not using credit cards.
However, with UltraFICO, consumers can improve their FICO scores through additional good-faith inspiring activities like always keeping a few hundred dollars in their bank accounts, and never reaching a negative balance. Even if a consumer does not have a FICO score, they are still eligible for an UltraFICO score, which can help this person who would otherwise struggle to obtain financing or simply not be able to achieve good credit standing.
UltraFICO helps millennial home buyers by taking responsible saving and spending into consideration as demonstrated by checking, savings, and market rate account bank records. It provides lenders with a more complete picture of a consumer’s creditworthiness and gives borrowers a different way to demonstrate creditworthiness.
Poor or Nonexistent Credit
This new scoring system is a huge game-changer for