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.
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
- Water and Sewer
- 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.
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.
- 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
- 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.
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