PHILADELPHIA–University of Pennsylvania Students Federal Credit Union here has introduced a new credit builder product aimed at helping students build their credit scores.
The CU’s new credit builder loan is designed to help borrowers increase their UltraFICO score. UltraFICO was launched by Fair Isaac in January with a goal of helping those with little credit history or with low scores. It complements the traditional FICO score.
“UltraFICO is meant to help exactly the types of people that are like Penn students,” SFCU Chief Lending Officer Adrian Lapenson told The Daily Pennsylvanian. Lapenson is a senior enrolled in Penn’s Wharton School of Business.
The $6.795-million SFCU told the publication its credit builder allows the credit union’s members to take out a low-interest loan with their account savings acting as the collateral if the borrower defaults on their loan. The loan also allows students to begin building or improving their credit score.
Changes Made
“There’s a couple of changes we’ve been able to implement to the way the loan is structured where the loan will interact with your checking account and generate checking account activity, reflecting in a better UltraFICO score,” Lapsenson told the Daily Pennsylvanian.
The credit union’s CEO, Wesley Sheker, told the publication the credit builder loan had taken a year to create as it sought to ensure it was in compliance.
SFCU told the Daily Pennsylvanian it is currently using word of mouth to raise awareness but it also plans to work with relevant student groups on a case-by-case basis to make more students aware of the offering.
The credit union has approximately 1,400 members.