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Is the Experian Credit Boost Worth Your Time?

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The latest program offered by Experian is their Credit Boost tool. This gives people a better FICO score by submitting monthly paid bills. You use the tool in combination with the mobile app or on a computer. So, when you use the credit monitoring service, you can benefit from alerts and other notifications sent to you by Experian. 

But is the Credit Boost program by Experian worth your time? Since it is free to use, it could be a great benefit.

However, this is only to the extent of how comfortable you are sharing your banking information with a third party. Regardless, it could be very beneficial to help keep you afloat and obtain some of life’s necessities.

It is important to note, though, this service will not be suitable or worth it for specific consumers. For example, if you have a good or really bad credit score, something like this will not be worth your time.

The Nuts-and-Bolts of How Credit Boost Works

This program allows users to add some positive payment history to improve their credit scores. This comes by way of paid monthly bills.

https://www.cnn.com/2021/03/22/cnn-underscored/improve-credit-score-experian-boost-review/index.html

To work, users link to their bank account and other accounts from where they pay bills. This is to verify all transactions added to the history.

The caveat here is that you must be paying the bills on time.

So, any accounts set up with AutoPay to your bank will qualify for Credit Boost. This will not work if you pay your bills with cash, checks, or some other form of payment. They must link directly with your bank account.

Signing Up for the Program

You can sign up for the program on a computer or mobile app. There’s a small amount of initial information that you give, and the process is fairly fast.

  • First, you supply a name, contact information, and the last four digits of your Social Security.
  • Then, to confirm it is you, you will answer several security questions.

Once your bank account syncs up with Experian, they can access the last 24 months of payments to add to your credit profile. But, you have to have a minimum of three months of payments within the previous six months. However, you can pick and choose which ones to process and go through.

Accepted Payments That Aren’t Usually on Your Credit Score

Experian will process a host of payments that usually go unreported to credit monitoring organizations. They accept things like:

  • Phone Bills
  • Internet
  • Satellite
  • Cable
  • Utilities
  • Water and Sewer
  • Garbage
  • Power
  • Streaming Services (Hulu, Disney + and Netflix)

How It Raises Your Credit Score

Doing this can immediately raise your credit score. Experian claims the average user can raise their FICO by 12 points. They also say about 62% of users do see a score increase. But, there are situations where the score will either stay the same or decrease. Continue reading to learn more.

Security Measures

To keep data secure, Experian employs SOTA encryption to store your credentials.

Soon, they should be able to tokenize the data with financial institutions. This will provide even more security measures to keep information safe, private, and away from prying eyes.

Who Will Benefit from Using the Program?

If your credit score sits at 760 or higher, you may not benefit from using this program. This tool is best for those who have scores ranging between 500 and 620. So, this could be meaningful if you want to get a lower interest rate for something like a personal loan.

But, it can also be helpful to beef up the financial history of a credit report.

For those who have a thin profile, or only a few lines on their profile, adding more data can help raise the score. It shows a history of more positive financial behavior.

What’s more, only those bills paid with a bank account will be eligible for the program. So, if you use any other mode of payment, this will not be beneficial to your score.

Pros and Cons of Experian Credit Boost

As with anything, there are some great benefits to using this kind of program, but there are also some pitfalls with it as well. Consider the differences between the following to see if it is something that could be right for you.

Pros

  • It is free, quick, and easy to set up and use
  • It allows users to raise their credit score with bills already paid, even subscription streaming services
  • The results give consumers more control over their financial prospects
  • If your credit score lowers after you add a bill, you can remove it from the queue, not affecting your score
  • If a lender, apartment complex, car dealer, or other such company relies on Experian credit scores, it will help you get some of the things you need

Cons

  • You cannot include rent payments into the history
  • There are some reports of people having their credit score go down after using the program. Such a case is a common occurrence for those who recently closed a credit card. This will result in a shift in the score because of the utilization ratio
  • Sometimes it does not do anything to improve a credit score, and it stays neutral. This is especially true for those with terrible scores or, sometimes, those who have excellent scores
  • Some people report that it is like playing the lottery. There’s no way to know the result until after the bills get added to the history
  • Experian is not the company that accesses your bank account, and it’s a company called Finicity. They access the information and streamline it to Experian. This means a third party is grabbing your data
  • Using Credit Boost will not help your score on TransUnion or Equifax, so it will not help you get something like a mortgage.

Final Thoughts

While Experian Credit Boost might be a good option for many people, there are those who it will not serve very well. So, whether it is worth it or not will rely on individual circumstances. For example, those with very high or super low credit scores may not see a benefit. But, those who are in the mid-range might get an excellent boost to their FICO score.

Even still, it is not a guarantee that just because you do it, your credit score will improve. Many things can happen where your score will either stay the same, or it will tank. Regardless of the risks, it may be worth it for those struggling to gain hold of their financial future.

Image Credit: Melpomene

After Bankruptcy, How Do You Repair Your Credit?

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Declaring bankruptcy is rough, but it is not the end of the world. With a little careful planning, you can re-grow your credit and build it up stronger than before.

However, it is going to take a little patience. In this article, we will talk about some steps to take to repair your credit as fast as reasonably possible.

Let’s explore some post-bankruptcy tips to repair your credit fast!

Don’t Make Any Career Changes Too Quickly

While changing jobs will not affect your actual credit score, it can come back to bite you when you are applying for any future loans or lines of credit.

This is because the agencies that decide if you are approved or not will generally factor in a report that concerns your employment.

What this means for you is that the financial entity will look at the last 24 months of your employment to ensure that you’ve been working long enough in one place. And thus, you are more likely to be able to repay them.

Changing jobs at this time is like shooting yourself in the foot. So, if you have any new business aspirations, then be sure to keep your current job. Then, you can build up those businesses in your free time – you don’t want to cost yourself any credit or loans you might otherwise be entitled to!

Keep Current on Non-Bankruptcy Payments

While filing for bankruptcy will close out most of your accounts, it does not cancel out every debt that you owe. Certain debts, such as alimony or student loans, will still have open accounts and will eventually need to be settled.

It is in your best interests to do this, and we recommend paying a little more than the minimum if you can. This is going to improve your debt-to-income ratio, and your credit is going to start climbing much more quickly than if you’d ignored these debts.

Make Sure That Your Payments Are Being Reported

While you are paying off those non-bankruptcy debts, you should determine who reports such payments to the credit agencies. While companies aren’t obligated to report that you are paying, it can really help you get out of the ‘bankruptcy hole’ when they do report this information.

You can also try to have things like rent and utilities reported to the credit agencies, check to see if that is an option, and then have it done. While these payments do not always factor in on applications, every little bit helps, so take advantage of it!

Apply for New Credit to Build Your Credit Score Up

You will need to apply for new credit, but you need to be careful about this by aiming low. This is because every time you apply for new credit, a check is run, which will be noted. That means that you will look like a ‘risky proposition on paper if you apply to everyone, and we want to avoid this.

So, target some credit options that will help you and that you are more likely to get. Examples of this include the following:

  • Gas cards
  • Credit-builder loans
  • Secured credit cards
  • Credit lines with favorite retailers

These options are much easier to get than an unsecured line of credit from a major provider. Therefore, start with one or more of these options so that you can start modestly and build yourself up from there.

When You Get New Credit, Keep Your Balances Low

Once you get new credit, you are going to need to exercise your powers of restraint. This means that you will need to keep your balances low so that you don’t hurt your shiny, new credit.

The best way to do this is to pay more than the minimum to keep new debts managed and reduce the amounts you will be paying on the accrued interest.

You should also set up autopay whenever you can. Autopay makes it easy since you won’t have to micro-manage your payments to know they are being made on time.

One strategy to help yourself pay more than the minimum is setting up multiple small payments throughout the month. That way, it feels like the ‘hit’ on your paycheck is less while you are paying MORE.

Remember, those interest rates on debt are calculated against the total that you owe, so paying a little extra now saves you from paying a whole lot of interest over a more extended amount of time!

Bankruptcy Is Not the End, So Start Rebuilding Now

Today, we’ve talked about the steps you need to take after bankruptcy to rebuild your credit. Remember, you don’t want to change jobs during this time, and you are still going to have some non-bankruptcy debts – so get a payment plan started to get those settled and keep them managed.

Make sure that creditors who are willing to report your on-time and early payments are doing so and apply for new credit but be humble about it so that you don’t make yourself look like a risky spender. Then, once you get that new credit, keep up with your new debts so that these new lines of credit can build you up over time.

We won’t kid you. It’s a long road to credit redemption, but with a bit of patience and the tips we’ve shared today, you’ll get there. You can count on it!

Image credit: [Steve Stark]

How to Build Your Credit Score and Stay Debt Free

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Many of us know that being in debt is typically a bad thing from a very young age, but do we know why? Unfortunately, credit scores are not often discussed, so they may come as a bit of a shock to those who have just turned 18 and are looking to start building credit.

Your credit score has a significant impact on many areas of your life. It affects things such as buying a house, getting a credit card, and getting a loan. So, it is crucial always to keep it in mind when going about your everyday business.

Here we will tell you tips to build your credit score without going into debt.

What Is a Credit Score?

Your credit score is a three-figure number that indicates how likely you are to be a safe bet when it comes to loans. Essentially, it lets lenders know whether you are a risk. The higher the number, the better your credit score and the “safer” you are considered. 

https://www.cnbc.com/select/how-to-build-credit-and-achieve-a-good-credit-score/

Your credit reports determine your credit score, but if you had never had to pay anything in your name, then it’s common to have little to no credit history. 

CREDIT SCORE

Building a Credit Score

There are many ways to go about building a credit score, but some are better than others. For example, many people will tell you to get a small loan and pay it off when due simply to prove that you can do so. However, things are not always certain in life. What may not seem like a risk at the beginning can indeed become one.

So, how do you build a credit score without debt? 

Sign on as a Co-Holder’s on a Family Member’s Credit Card

One of the quickest and easiest ways to get a credit score is to be a co-holder of a credit card. For example, if your parents are willing to let you do this, you can be added as an authorized user to their account. Once you are approved, the payment history will lend itself to your credit score. Essentially, you get a boost in credit score with no work. 

It is better to become an authorized user on a trustworthy person’s credit card.

The last thing you would want to happen in this situation is that they make a late payment or even fail to make one altogether. This would then, of course, negatively impact your credit score through no fault of your own.

Open Your Own Credit Card

Perhaps a safer way to boost your credit score is to get a credit card with just you as an authorized user. This way, you won’t be reliant on anyone else’s spending habits for your credit. Of course, most credit cards will require you to have a good credit score already before they approve you. However, one option is a secured credit card.

A secured credit card needs a security deposit. The amount of money that you deposit with them is your credit limit. Essentially, it’s insuring you against yourself. You need to treat it like a typical credit card and pay the amount off when it’s due to receive your deposit back.

However, remember that failure to pay the sum or even a late payment negatively impacts your credit score. It also means that the lender keeps your security deposit to recover the money that you spent.

Set Up Autopay

The easiest way to quickly accumulate bad credit is to make a late payment. Your payment history makes up 35% of your credit scores, and so paying late does significant damage. In addition, late payment even just once can result in you being reported to the three main credit bureaus.

This report of late payment will then stay on your record for up to seven years. So, to avoid this, you should consider setting up autopay. It means that the amount owed will be automatically deducted from your account each month.

You can always keep a record of the amount spent and check it yourself against the amount automatically deducted to ensure that you are not being overcharged.

Get a Credit-builder Loan

A credit-builder loan is not your average loan, but it is designed to help people build up their credit scores. With this type of loan, you will need to place money into an account every month. When the set period is up, you will receive the total sum of your deposited money (possibly plus interest) minus fees. 

What you are doing shows that you can be trusted to pay a certain amount of money by a certain deadline. Additionally, it demonstrates to companies that you are trustworthy and can keep your money in order.

To Sum Up

A credit score has a significant impact on daily life, but it is often overlooked when we are children. The importance of building up a good credit score cannot be stressed enough. However, many people state that getting a loan is the best way to go about this. Unfortunately, that is not always the case, as any form of a loan carries risks.

Instead, we have listed above some of the best alternative ways to build up a good credit score without the need to take out a loan. Each of the methods listed above still carries a small amount of risk, and it is up to you to decide which way is the best for you. 

If you need to rely on someone else to get your credit scores, then becoming an authorized user is a great way. However, remember that you are reliant on someone else. Otherwise, lenders will insure you against yourself. Be sure to do you homework before opening a credit card.

Image credit:[Margo Hercules].