Content of the material
- What is Experian Boost and how does it work?
- How Experian Boost Can Help
- Downsides of Experian Boost™
- How does Experian Boost work?
- So, Can Experian Boost Improve Your Credit Score?
- My second Experian Boost
- Is Experian Boost safe to use?
- What Is Experian Boost™
- Other Ways to Add Payments to your Credit Report
What is Experian Boost and how does it work?
For years, the credit bureaus have all but ignored folks who don't have credit cards or loans. You can pay your power bill and cellphone service on time every month for decades, and still not have good credit.
That's now changing. Experian Boost uses your bank account history to track all of those utility payments and service bills that have gone unrecognized. That positive bill payment history then gets factored into your Experian credit reports, potentially boosting your credit scores. And best of all, it's free.
To use Experian Boost, you simply go to the Experian website and sign up. You'll provide your bank account information and give Experian permission to scan your payment history. You can then verify and confirm the information you want added to your report.
Your Experian credit scores will update as soon as you complete your sign-up for Experian Boost. According to the company, the average user received an increase of 13 points to their FICO® Score 8.
Unfortunately, rent payments aren't included. But Experian Boost can find and include a variety of different bills, such as home utilities and communication services:
- Streaming services
Yes, you read that last one right. Several major streaming services have been added to Experian Boost, including: Netflix, HBO, Hulu, and Disney+.
Most major utility and communication companies are recognized by Experian Boost. However, if a bill isn't recognized, you have options. Boost will take you through a Q&A form to identify the reason the account isn't recognized. If you still believe the account should qualify, you can submit the account information to Experian for internal review.
Positive payment history going back up to two years can be included. However, you'll need to have made at least three payments to the account within the last six months.
How Experian Boost Can Help
Experian Boost is designed to help the 62 million Americans who have “thin credit files”. Credit bureaus need information to establish your creditworthiness, and they need payment history to do that.
Experian Boost gives Experian access to more payment history, which can boost your credit score.
Downsides of Experian Boost™
Though Experian Boost is a great feature for consumers who might not have a strong credit file, it isn’t perfect. Here are a few downsides of the feature:
- If you’re a long-time avid credit card user who charges everything for the rewards points and pays your bill on time and in full, Experian Boost may not be very beneficial. Your credit history already includes the payment history from your credit card payments (which are reported by the card issuer). Adding a few more on-time payments is unlikely to have a large impact on your credit scores. Experian Boost is most beneficial for users who do not have a very robust credit file.
- Lenders might be using a version of a FICO Score or a different credit scoring model that doesn’t work with Experian Boost. There’s no guarantee that using Experian Boost will increase your odds of approval for a specific credit product from a specific lender.
- Experian Boost looks at cell phone, utility and service payments. It would be more helpful if it could include rent payments as well. It is possible to get rent payments added to your credit report, though—here’s how.
- As Experian itself points out, adding utility payments to its records won’t affect what’s in your files with the two other major credit bureaus–Equifax and TransUnion. So depending on which bureau a prospective lender or credit card issuer uses, Experian Boost may not help you get approved.
How does Experian Boost work?
The Boost program is the result of Experian’s in-house research, which identified a strong correlation between paying utility bills and future loan defaults. FICO and VantageScore agreed with Experian and now you can get these bills factored into your credit score.
Getting those extra points is easy. The free program is an opt-in one that you initiate by visiting Experian’s website. Once there, you’ll need to identify yourself. This is much the same process you follow to get your credit report online.
Once you prove you are who you are, you begin the process by adding your checking account information to your credit file. You can add more than one checking account from more than one bank. You can also use a joint account, but you can’t use a business checking account.
Behind the scenes, Experian uses leading financial data aggregator Finicity to make all the connections between Experian, FICO, VantageScore and your bank. Most banks are already in the network, but some smaller ones are not. If your bank doesn’t connect, just let Finicity know and it will reach out to the bank in question.
Here are a few great features that make the program a winner for everyone:
- It grabs only positive payment information – nothing negative in your checking account will show up.
- It looks back 24 months from the get-go, so most people won’t have to wait for a payment history to be built.
- It covers all kinds of utility payments like electric and gas, cable, cellphones, landlines and even water bills if they are identifiable.
- You can opt out at any time.
So, Can Experian Boost Improve Your Credit Score?
Two thirds of people who sign up for Experian Boost see an increase in their score, and the average jump is 13 points, according to Griffin.
If your credit score is already at the higher end of the spectrum (mid-700s and above), any boost you see may be minimal. But for people with credit scores of 680 or lower, the average increase is 19 points.
“The people who see the most impact are people who have a short credit history, a thin credit profile made up of fewer than five accounts, or scores below about 680,” Griffin says. “So if you’re just starting out or you’ve had some credit issues in the past but you’re moving in the right direction, that’s who is benefiting the most.”
If you don’t see any benefits to your score initially, it is possible that Boost will help over time through a sustained positive payment history. Still, you can choose to remove Experian Boost from your credit report at any time with no negative repercussions; your Experian credit score will simply revert to what it was before.
My second Experian Boost
Fast forward to June 2020, and I’d moved again. My Experian app sent me a notification that it was time for me to check my updated score. I did—it went from 645 to 648. I was about to close the app and try to be excited about my 3-point gain, when I noticed that Experian was asking whether I wanted to confirm new utility payments it found on my bank account eligible for Boost. Of course I did!
I had been paying my utilities for over three months now, so they could count toward my FICO score with Boost. I confirmed the payments and raised my score by 9 extra points to 657.
That felt wonderful. Gradually, my FICO score was climbing higher and higher. And one credit limit increase, one credit card upgrade and one new credit card later (thanks, CardMatch!), I got to 667 this January.
I was getting so close to good credit.
Is Experian Boost safe to use?
Whether Experian Boost will actually help your credit may vary. Even if it doesn't help you, however, Experian Boost will not hurt your credit score.
For one thing, Experian Boost looks at your banking data, not your credit history. This means there is no credit inquiry. Plus, Experian Boost only includes on-time payments, which add positive payment history. So, that bill you paid three days late last year won't be included.
That being said, it's important to keep in mind that failing to pay your utility or other bills can hurt your credit score. But that would happen whether you use Experian Boost or not.
If you fall behind by more than 60 days, your provider can report your account as delinquent to the credit bureaus. Payment history is 35% of your FICO® Score. As such, late payments can severely damage your credit. Additionally, negative items, like late payments, can stay on your credit reports for up to seven years.
What Is Experian Boost™
On-time payment history is the most important factor in your credit score accounting for 35% of your total credit score, followed by credit utilization which makes up 30% of your credit score. This product allows consumers to add additional on-time payments to their Experian credit report by linking their bank account. Additional on-time payment history can help increase your credit score.
Using Experian Boost to boost your credit scores isn’t complicated. The first thing you’ll need to do is connect the account that you use to pay your qualifying utility, cell phone and video streaming service payments. After connecting the bank account, users can choose which positive payment histories from these services to add to their Experian credit report. If applicable, you may see the results of Experian Boost instantly.
Those most likely to benefit have “thin” credit histories, meaning they don’t have many credit accounts to report on-time payments to their credit report. According to Experian’s website, average users who received a boost improved their FICO Score based on Experian Data by 13 points. Remember that results may vary, and are dependent on factors like your existing credit profile.
Read More: What Is a Good Credit Score?
Other Ways to Add Payments to your Credit Report
There are several other systems that let you add regular payments to your credit report.
Experian RentBureau adds rent payments to your Experian credit report. It’s free and easy to use. Your landlord will have to be willing to participate.
eCredable Lift is a service similar to Experian Boost but run by TransUnion. Using both Experian Boost and eCredable Lift will place your utility payment records on two of your three credit reports.
These services have limitations. The change in your credit score won’t be dramatic, and it will only affect one credit report.
On the other hand, Experian Boost is free (there’s a fee to use eCredable Lift). These services are easy to use and pose little or no risk. What have you got to lose?