Credit Boost Programs: How do they impact getting a mortgage?
Some of you may have seen news in recent months about credit bureaus making moves to assist consumers with increasing credit scores, calling it an UltraFICO™ score or Credit Boost. Part of their strategy is to allow utility bills and checking accounts to positively affect reported scores.
What is it?
Opting into an alternative credit score program can unlock more credit opportunities for millions of hardworking people. By simply and securely linking with your checking, savings or money market accounts, your alternative score can enhance your FICO® Score based on indicators of sound financial behavior. By opting in, you could broaden your access to more lending options and better terms.
Does this affect my decision to purchase or refinance a home?
YES. At the time of this article, scores boosted through these programs are not usable for a mortgage transaction. Although an UltraFICO™ or Credit Boost score can be helpful in other financial situations, it cannot be used when obtaining a mortgage. Utilizing utility bills to boost your score also counts toward your debt to income ratio, making it more challenging to qualify.
What can I do?
If you are thinking about buying or refinancing a home, you should not opt in to one of these programs. If you have already opted-in, you'll want to OPT OUT of the program prior to starting your homebuying journey.
In order to opt out from Credit Boost on Experian, you need to call 800-509-8495 to verify your information and then it will be option 2, option 1 and option 1 again.
For the UltraFICO™ program, contact customer service at 888-342-6336 and ask how to remove yourself from the program.
We recommend that you do this prior to your loan officer pulling credit (one of the first steps in qualifying for a home loan).
If you have any questions regarding the information above, or action you may need to take, please speak to a licensed Mortgage Loan Officer in your state.