Credit scores are important because they help lenders decide whether you qualify for a loan, a mortgage, or any type of credit. Credit scores also determine what interest rates you will pay.
But people with a thin credit history and those recovering after a financial mishap struggle to increase their credit scores. But even if these people pay their utility and phone payments on time, credit bureaus don’t give them credit by increasing their credit scores.
What is Experian Boost?
Experion Boost is a free service that helps consumers improve their credit score by showing on-time payments for their utility and phone bills. Utility bills include gas, water, and electric bills. Phone bills include internet, wireless, and phone bills. Netflix was recently added. Experian has plans to add other streaming services in the future.
Experian claims that 100 million consumers will benefit from this service. The average credit score went up by 10 points as a result of using Experian Boost.
How does Experian Boost work?
You must give access to your bank account so that Experian Boost can check your bank transactions for utility and phone payments. The on-time payments for utility and phone bills will be reported on the Experian credit report. The on-time payments will also be used to calculate credit scores.
Experian Boost only uses positive data points that boost your credit score. If you had missed a utility payment, that will not be reported. This is different from how credit scores usually work where on-time and missed payments are both reported.
Note that this product works by pulling data from your bank account. If you pay your phone bills or utility bills through a credit card, Experian Boost will not work for you.
How to get your updated credit scores through Experian Boost?
Here are the steps you need to follow to get your updated credit scores
- You sign up for an Experian Boost account
- Connect your bank account
- Give a few minutes to scan bank account for utility and payments
- Get updated scores in real-time (it took me 5 minutes)
Experian Boost can be removed anytime
If you are not comfortable with the Experian Boost, you can remove the service anytime using the website.
Experian Boost does not work with all credit scores or models
Experian Boost works with FICO 8, FICO 9, VantageScore 3, and VantageScore 4. If your lender uses a different model or report, then the lender may not see your improved scores.
Disadvantages of using Experian Boost
Some lenders may see phone and utility payments on your credit report and assume that those are part of your debt. Experian says that it is working with lenders to make sure that they see these payments as positive payments rather than debt.
UltraFICO Vs Experian Boost
Both UltraFICO and Experian Boost both improve credit scores by including data not previously included to calculate credit scores.
UltraFICO score is based on how responsible you are with your checking, savings, or money market account. The credit scores are based on your account balances, how long you have had the accounts, and whether there are any overdrafts on your accounts.
Experian Boost is based on your on-time bill payments of utility and phone bills.
Experian Boots and UltraFICO, though they use different consumer information, can give lenders a better understanding of the consumer’s finances. UltraFICO tells lenders about the cash flow information whereas Experian Boost informs them about additional payment history.