2019 could prove easier to score a loan

HOUSTON - Starting in 2019, the new opt-in ultra-FICO credit score system will start rolling out, making it easier for millions of people eligible for loans to possibly secure one. 

Under the current system, your FICO score is a number predicting how worthy you are as a borrower. A huge change is coming in 2019 which will likely mean that about 7 million people who can't get a loan today should be able to get one under the new scoring method. 

Ted Rossman, a credit card analyst with CreditCards.com, says the new system should be most welcome by college students and those looking to establish some for of credit, but he is weary of the possible implications of lending money to those who may struggle to pay it back. "This really is an effort by the financial institutions to find a broader pool of consumers to offer loans to and that's where it could be a little bit risky because times are really good right now. So, it could be a little bit of a sign of a market pop potentially."

The change will affect anyone who has a credit score in the low to mid-600's. Essentially, you can apply for credit in the same way, but if your application gets rejected, you can ask for an "Ultra-FICO" score. This grants permission to check your savings, checking, and/or money market account.

Rossman says this will especially help those who are young, or who've had debt problems in the past, but who have money in the bank and aren't bouncing checks. To improve their Ultra-FICO score in the new model, Rossman advises the two most important things a consumer can do is keep over $400 in the bank, and don't overdraw your account.

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