Credit-scoring giant FICO (NYSE:FICO) just announced that a brand-new credit scoring model, known as UltraFICO, will debut in 2019. The intention is to allow consumers who may have some dings on their credit, but who have been very responsible with their checking and savings accounts, to have a better chance of qualifying for loans and other credit products.

In this Industry Focus: Financials clip, host Jason Moser and Fool.com contributor Matt Frankel discus the UltraFICO model and whether it's a good idea.

A full transcript follows the video.

This video was recorded on Oct. 22, 2018.

Jason Moser: Let's take a look at UltraFICO, which we mentioned at the beginning of the show. Over the weekend, speaking of American Express, one of the things I get with American Express is, every quarter, they send me my free credit report. I get this, and I can look through and dispute any problems or anything. It gives me my FICO score. And it always makes me feel good, because I take good care of my credit score. My FICO score is still good. So, I'm going to sleep at night, I'm feeling nice and safe and comfy in my home, knowing that the bank is going to keep lending me that money because I've got a good FICO score. Then, I wake up and read about this UltraFICO score. And now, I'm getting a little bit concerned.

This sort of piggybacks on the conversation we had last week in regard to the return of zero-down subprime mortgages. Essentially, Fair, Isaac, the company that created and uses the FICO credit score, is going to roll out this new scoring system in early 2019 that essentially factors in how consumers manage the cash in their checking, savings, and money market accounts. It's basically another way for them to measure an individual's particular credit risk.

The whole idea behind this, it's not to make sure that they are lending to the best possible borrowers. What they're trying to do is expand the pool of borrowers and give more credit to more people, to grow that opportunity to lend to more people. I can't help but feel like maybe, between last week's story on the subprime mortgages and this week's UltraFICO score, I'm a little bit skeptical at first glance that this is a good idea.

You said that you're going to be speaking with these good people out there this week. Tell me a little bit about what you think about this UltraFICO score.

Matt Frankel: It makes sense to a certain degree. When you go to open a checking account, they run a credit check on you. It's a product that you need good credit to get. You need to use your checking account responsibly to keep it open. So, it is somewhat a predictor of responsible financial behavior. But, at the same time, this is being used as a backup FICO score. Here's the idea -- if you go to apply for, let's say, a mortgage, they run your FICO score and say, "Oh, your score is too low. You don't qualify for a mortgage." You can say to this lender, if they give you the option, "Now check my UltraFICO score," which would take into account if you've had a checking account open for a long time with no overdrafts, no defaults. It would take that into account and potentially raise your score and allow you to qualify for a lending product that you otherwise wouldn't. So, it makes sense to a degree. But like you said, I'm skeptical. There's a reason that people with low FICO scores don't qualify for loans, it's because they generally don't have a very strong history of financial responsibility for one reason or another.

I'm approaching this with caution. I'm meeting with FICO's CEO, as you said, tomorrow morning. I definitely have a list of questions written down for him. I'm curious to hear what they say about it in more detail and the rationale behind it, which I will definitely be glad to share with our listeners next week, whatever I take out of that meeting. For the time being, I'm approaching this with caution. I like the FICO score system the way it is, simply put. I think it does a very good job of predicting consumer financial behavior. This seems more like a way to boost banks' lending pools a little bit more.

Moser: Yep. Bottom line is, I'm not going to change what I'm doing. I think I'll dance with what I've got, because it seems to be working so far.

Jason Moser has no position in any of the stocks mentioned. Matthew Frankel, CFP owns shares of AXP. The Motley Fool owns shares of and recommends Fair Isaac. The Motley Fool has a disclosure policy.