Credit scores are used by lenders to determine if they will give you a loan (auto, mortgage, credit card). Businesses such as insurance and phone companies are also using credit scores to decide if they will issue you a policy or provide you with service.

While the UltraFICO may help those who choose not to use credit cards, there are concerns about it.

Information from your credit report is used to calculate the credit score. The information used has typically included your bill-paying history, number and types of accounts, outstanding debt, collection actions, and the age of your accounts.

The recently announced UltraFICO credit scoring system will look at how you manage the cash in your checking, savings, and money market accounts. It will look at account balances, transaction activity, overdrawing frequency, how long accounts have been open, and evidence of savings. The goal of this score is to help people who have little or no credit history get loans or credit. The score isn't available yet. It will be tested in a pilot project early in 2019 and may become widely available in the summer.

UltraFICO will be opt-in, meaning that a consumer will be asked if they wish to have their banking activity included in their credit score calculation to boost their score. The consumer will be able to choose the accounts to be used.

If you have already have good credit and a well-established credit history, you won't need to use UltraFICO.

While the UltraFICO may help those who choose not to use credit cards, there are concerns about it.

  • Privacy. If you use it, you will be sharing your banking information with third parties. In this instance, those third parties include the creators of the score: credit scoring company Fair Isaac Corporation, credit bureau Experian and financial technology company Finicity.

  • Financial well being. Someone managing their cash well may not mean that they can manage credit well. It also doesn't mean that they can afford a loan or credit card.

  • Availability. Once widely available, lenders may not decide to use it.

Whether UltraFICO becomes widely available or not, you will want to practice good money management. Pay your bills on time.

  • Keep your credit card accounts below the maximum limits.
  • Limit the number of accounts you open.
  • Grow your savings.
  • Avoid overdrawing your account.