Connect with us

Business Finance

Freelancers, big brands salivating over new UltraFICO scores

(FINANCE) Everyone from freelancers to giant business are impacted by the new UltraFICO scores, ushering in a new era of lending in America.

Published

on

ultrafico credit score

If you’re anything like me, then you don’t like to spend money you don’t actually have. I didn’t have a credit card until I was 28 years old. I moved to another country on cash alone. My wife and I bought our first car with cash. We thought this made us responsible. The credit reporting bureaus and financial institutions disagreed.

To our surprise, you’re not considered a “responsible American” unless you’re in a constant cycle of borrowing money from banks through credit cards and loans.

We’re not the only ones who think this system needs improvement. A growing number of millennials have eschewed traditional credit cards and loans for various reasons, and this has left these otherwise responsible Americans out in the lurch regarding their credit scores.

We’ve all heard the adage “bad credit is better than no credit,” but really take a moment to think about how silly that is. In this day and age, having a history of borrowing money from the banks and not paying it back on time is somehow better than paying for everything yourself without help from bank loans, credit card companies, or government programs.

According to the Fair Issac Corp. (issuer of FICO scores), about 7 million consumers have too-low scores (in the high 500s or low 600s) to be considered safe bets for lending. Fortunately, baby steps towards credit reform is on the horizon, in the form of UltraFICO scores.

Next summer, customers unsatisfied with their standard FICO score will be allowed to apply for an UltraFICO score.

The difference between the two is that while a normal FICO score is based off of credit history, an UltraFICO score takes standard everyday bank account history into consideration. Your current checking balance, length of checking history, transaction frequency, and overdraw history will all be a vital part of your UltraFICO score.

The UltraFICO increases the chance of loan approval to millions of Americans that might otherwise be denied, and that has a lot of people happy — including lenders themselves, and the many companies with big ticket items that typically rely on consumers that finance their products (furniture, jewelry, cars, etc. not just housing).

Let’s not kid ourselves here, this isn’t a charity program. The UltraFICO exists to widen the possible customer base for loans as an entire generation opts out carrying debt. The more people approved for loans, the more money credit issuers stand to gain. This is a calculated business move, but it could possibly benefit all parties regardless.

That’s not to say there aren’t pitfalls here. On a macro scale, American consumers already hold $1 trillion worth of credit card debt, and loosening loan requirements could very well cause this debt to balloon even further.

On a micro scale, opting in for an UltraFICO score means handing over sensitive personal data of your banking history over to third parties, which is something we should all be wary of doing.

It’s not a new concept, in fact in 2011, a major data company launched an alternative credit score to include reporting on your phone bills, cable bills, and so forth, to open lending (some mortgage lenders do use this alternative score in their practices).

It’s not just of interest for companies with big ticket items, but for small businesses and freelancers that don’t rely on credit cards, which could open new lines of credit as they build their companies.

Depending on your views, this program either lowers the limits for acceptable loan applicants and puts our economy at risk, or merely broadens our definition of personal fiscal responsibility. As I’m solidly in the second camp, I’m excited to see what these new changes can bring to the table in 2019.

James M Lane, AINS was born into this world without his consent an ornery 60 year old man with a full beard. He has worked in the insurance industry for the last half decade, and was a foreign language preschool teacher for years before that. He writes horror in his spare time. Follow him on Instagram for deliberations on pro wrestling and beards.

Business Finance

COVID-19: Governors fail renters, a 90-day rent freeze is the only option now

Independent contractors whose only sin is renting instead of owning, are facing evictions even as Governors put tiny bandaids on the situation. A 90-day freeze is the nation’s only option to avoid mass migrations or spikes in homelessness.

Published

on

COVID-19 moving boxes

2020, it seems, is the year of rebranding—even when it comes to our impromptu recession brought on by a variety of factors (but largely thanks to COVID-19). Despite the negative connotations of widespread economic disaster, some people, such as St. Louis Federal Reserve President James Bullard, are regarding this instance as “an investment in U.S. public health.”

Should we all be so optimistic? Bullard seems to think so.

To be fair, James Bullard’s “optimism” also accounts for taking a “$2.5 trillion hit” to the economy, so it’s not all sunshine and dancing unicorns (this time). However, the long-term outcome of handling this crisis correctly—a process which involves bailing out small businesses, matching wages, and contributing to rebuilding and supporting our healthcare infrastructure—will be, according to Bullard, positive.

Bullard’s optimism does come with an important message: As with pretty much anything, the simpler we can keep solutions to this problem, the better the outcome will be. We’re not off to a great start; between states’ varying responses to COVID-19 procedures and mixed congressional support for a stimulus package, the process of dealing with economic fallout has become more complicated than some—Bullard included—would consider “ideal”.

Unfortunately, there isn’t really an “ideal” outcome here that is also practical without requiring a heretofore unseen level of cooperation and cohesion between political parties and state-based cultures. In the event that we can actually pull together and actively invest, as Bullard suggests, in our infrastructure, the implications for our economy will ultimately be positive—even if only in a pyrrhic victory kind of way.

In unprecedented times of crisis—you know, like right now—a little bit of optimism doesn’t hurt. Over the course of the next few months, you’ll hear all sorts of different takes on the situation; some people—those who identify as “realists” but really just enjoy bumming people out—will actively speak out against positive attitudes, while others will avoid “getting their hopes up” because they don’t want to be disappointed.

But, if Bullard’s optimism is to be believed—and we’re choosing to think it is—you have full permission to let yourself hope, at least for now.

Remember, there are a couple of things you can do to bolster your immune system without medicine during this time. One of them involves keeping a positive outlook, and the other one is eating plenty of garlic; we’ve found that one accompanies the other.

This story was first published in our Real Estate section.

Continue Reading

Business Finance

Gov. Cuomo first to issue 90-day moratorium on commercial, residential evictions

(NEWS) NY Governor, Andrew Cuomo is the first state leader to put a halt to all commercial and residential payments in an effort to stem the COVID-19 crisis.

Published

on

gov cuomo

New York Governor, Andrew Cuomo is the first state governor to put a moratorium on residential and commercial evictions in response to the COVID-19 outbreak, specifically hitting pause for 90 days in his state. This is part of a $10B relief package that includes utility payments missed during this outbreak as the state (and all states) are strained by the global pandemic.

This will not only help renters to find stable footing as so many have lost their jobs overnight, but commercial renters (like restaurants) that are worried about being evicted during a time that they were shut down by the government.

Reactions have mostly been positive, but many are still pushing for a freeze on rent, essentially rent forgiveness during this period since mortgage holders can roll their 90 days on to the end of their loan term, but renters cannot.

For many landlords, rent is their exclusive income and they have very few units, but they too will be under a mortgage freeze on their buildings under this Order, providing some relief. Not to mention Tax Day just moved from April 15 to July 15.

Meanwhile, a state group, Housing Justice for All, is calling for the rehousing of every homeless individual using emergency rent assistance and in vacant homes. They cite the risk of viral spread through the homeless shelter system, as well as viral possibilities among homeless people living on the streets.

There is no known answer in this time of being tested, but a freeze on rents and mortgages in New York will likely lead to other governors taking the same route, and renters might be able to breathe a little better soon, especially those who have lost their jobs and independent contractors whose business immediately died on the vine.

We’ll be watching for other states’ reactions to rents and mortgage payments.

Continue Reading

Business Finance

COVID-19: Self employed Texans get some relief benefits

(BUSINESS FINANCE) Self employed? Worried about the corona virus hurting your business? Texas says you’re STILL eligible for cash-related COVID-19 coverage!

Published

on

self employed

When I heard ‘It’s hard being your own boss’, I thought people meant employee reviews were harder to do since you have to carry both parts of a tough conversation in your home office.

Now, watching as self-employed artists, caterers, events specialists and more are struggling in the wake of the COVID-19 pandemic, the image is less ‘Ha!’ and more ‘AH!’.

It’s bad out there, y’all. And my heart goes out virtually, as per CDC guidelines. But in every viral cloud, there’s a colloidal silver lining. In the great state of Texas, that lining is: You’re probably eligible for disaster-based unemployment.

Yes, really!

Straight from the Texas Workforce Commission’s mouth: If your employment has been affected by the coronavirus (COVID-19), apply for benefits either online at any time using Unemployment Benefits Services or by calling TWC’s Tele-Center at 800-939-6631 from 8 a.m.-6 p.m. Central Time Monday through Friday.

Now how does that cover the self-employed? Simple…kinda.

You’ll need to apply through the Disaster Unemployment Assistance and then take the extra steps of providing different proof than your 9-5 friends.

Firstly, you have to prove you’re self employed. If you’ve been paying you under the table, this is where the poop hits the fan, I’m afraid. The government will need things like (any given one of these): Insurance bills, business license, a recent ad, an invoice, or sales records.

Were you just about to start your own business when all this went down? Fortunately you’re covered too, so long as you have proof of prospective self-employment, say: The deed to a building you just bought, loan documents, ‘Grand Opening’ announcements, and so forth.

For the full list of documents that suffice, visit the TWC site directly and check what proof your pudding needs.

This situation is a Corona-cluster-cussword, but there’s help out there.

Reach out. Grab it. And then wash your hands.

Continue Reading
Advertisement

Our Great Partners

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Emerging Stories

Get The American Genius
neatly in your inbox

Subscribe to get business and tech updates, breaking stories, and more!