Are you tired of being ripped off by banks, credit card companies, and other lenders due to your poor credit history? If so, you might need to boost your credit score.
Fortunately, Experian, one of the three major credit reporting agencies, is introducing a new tool to help you boost your credit score instantly— Experian Boost.
Experian Boost is an opt-in platform that allows you to add more information to your credit history to potentially generate a higher credit score.
The platform is opt-in because you have to authorize Experian to be able to connect your online bank account and extract the information needed to boost your credit score.
What is Experian Boost?
Credit scores usually are calculated using information in your credit report.
This information may include loans and lines of credit, such as credit cards, car loans, and student loans. This method has always disadvantaged those with limited credit history and poor credit scores when it comes to accessing loans and credit.
Given this, various stakeholders have been trying to change the way credit scores are calculated to ensure individuals with a limited credit history or poor credit scores can access credit.
One of the ways to achieve this is the enactment of the Credit Access and Inclusion Act of 2017, which would give utility companies, telecommunication companies, and landlords the opportunity to report their customers’ credit history to the three major credit reference bureaus.
Experian could be looking to capitalize on these efforts to help its customers improve their credit scores by offering them new ways to show positive payment history.
The company conducted a pilot study on Experian Boost and found that the product had the ability to:
- Determine a credit for 10 percent of consumers who don’t have a score due to a thin credit file
- Improve the credit score of 75 percent of individuals with a FICO Score below 680
- Move 5 to 15 percent of customers into a better credit score category.
You will be able to access Experian Boost directly before you apply for credit. You won’t pay a dime for it. You can register on the Experian website in the meantime, but a mobile app will soon be available.
How Experian Boost works
You will need to provide your online bank account information for Experian Boost to scan your bank account for utility and telecommunication payments.
These may include electricity, water, cable, and mobile phone bills. You will need to first sign up for a free account to allow Experian can verify your identity.
Afterward, you will need to sync your online bank account, so Experian Boost can be able to identify eligible utility and telecom bills that you have paid over the last two years.
Once the payments have been identified, you can verify and add them directly into your credit report. The information will then be included in your credit status immediately, boosting your credit score.
The process is very simple and takes only a few minutes to complete.
It is worth noting that Experian Boost only considers positive payment histories. So you don’t have to worry about missed and late payments affecting your credit score. Moreover, the platform allows you to remove any data whenever you want.
Who Can Benefit from Experian Boost?
According to Experian, you will significantly benefit from Experian Boost if your credit score falls between 580 and 699. This range is typically dominated by subprime borrowers who have fair to poor credit scores.
If your credit score is anywhere from 580 to 669, then you are in the fair category. If it falls below 580, then you have a poor credit score.
We’ve seen that in the initial testing, Experian Boost was able to improve the credit score of 75 percent of consumers whose credit score was below 680.
Moreover, the platform helped 14 percent of consumers with poor credit score to boost their score to a better level. Boosting your score can make a huge difference in your chances of getting approved for credit.
This is because lenders rely primarily on credit scores to determine the right interest rate for you, and hence how much in interest payments you will need to make over the duration of your loan.
Individuals who have subprime credit scores can pay up to $200,000 more compared prime borrowers in their lifetime, simply because they have lower credit scores. This is why credit repair companies are popping up all over the place..
Therefore, by raising your credit score with the telecom and utility payments information, you can save a significant amount of money on your loans and credit cards every month. This can help you achieve your financial goals quickly.
Three Things You May Not Like About Experian Boost
Before you use Experian Boost to improve your credit score, there are a few things you need to keep in mind. Otherwise, you may end up with a worse credit score.
Lenders use different credit scores to determine borrowers’ eligibility
You should realize that lenders have several options for credit scores when it comes to determining your creditworthiness. Experian Boost relies on the FICO Score 8
It may be able to boost that particular FICO score, but leave your other credit scores relatively lower.
Late bill payments can hurt your credit score
Experian Boost is designed only to boost your score if you make on-time utility and telecommunication payments.
Experian will delete from your credit report any accounts for which you have defaulted payments for three consecutive months. This can cancel out any improvements in credit score you may have gained with Experian Boost.
You must grant Experian access to your bank account information
To enjoy the benefits of Experian Boost, you will need to create an Experian account and agree to allow Experian link to your online bank account to scan utility and telecom bill payments.
There have been fears about the potential risk involved when you allow companies to have access to your personal data.
Experian Boost Review Bottom Line
Your credit score plays a great role when it comes to accessing credit and loan products. It determines whether you are approved for a credit card or what interest rate you are offered on loan.
You may have a hard time getting credit if you have limited credit history or poor credit score. Therefore, you may need to improve your credit score.
There are several ways to improve your credit score, like cleaning up your credit report, paying down your balances, increasing your credit limits, negotiating outstanding balances, or being added as an authorized user on someone else’s credit card account.
These methods can, however, take a lot of time to deliver the desired results. They won’t be helpful if you need credit urgently.
With Experian Boost, you can potentially improve your credit score instantly. You’ll only need to link the platform to your bank account, and it will extract the information required to bump up your score.
Consequently, you will be able to get credit at better interest rates. You won’t need to pay any additional charges to use Experian Boost, and the process is simple and fast.