Does poor credit or low credit prevent you from qualifying for a loan or a reasonable interest rate?
If you use traditional tactics, it can take several months to get your credit score down to a favorable level.
With Experian®, one of the top three credit bureaus in the United States, you don’t have to go down this arduous path.
The tool known as Experian Boost ™. could increase the creditworthiness of millions of consumers, especially those who do not have significant borrowing.
Users can give the credit reporting agency permission to link their bank accounts and gain access to their telecom and utility payments to update their FICO® score in real time.
This is how Experian Boost ™ works
In addition to providing free credit reports, Experian is committed to helping people improve their scores. Here’s a quick rundown of how Experian Boost can help you.
The basics of Experian Boost
First of all, you don’t pay a dime to use Experian Boost. It’s a free tool that helps people struggling with credit building.
If you want to increase your balance using the tool, you will need to allow it to scan your bank account transactions to identify payments for cell phones and utilities. The information extracted by the tool is reflected in your Experian credit report and used in calculating various credit scores.
It’s worth noting that Experian Boost is only interested in positive payment history. Delay in payment is not taken into account.
So you don’t have to worry about missed cell phone or ancillary billing payments affecting your creditworthiness. Once Experian Boost identifies utility and telecom payments, you will need to review the details and confirm that they should be added to your Experian credit record.
You will then receive an updated FICO score in real time. The entire process takes about five minutes and will increase your credit score almost instantly.
What Credit Scores Experian Boost Impacts
This tool works with the main credit scores that lenders use, namely:
- FICO 8
- FICO 9
- VantageScore 3
- VantageScore 4
However, if a lender uses Transunion or Equifax credit reports to determine your eligibility for a loan or credit facility, Experian Boost will be of no further help.
It is also noteworthy that Experian is partnering with Finicity, a third party company that will facilitate the transfer of data from consumers’ bank accounts to Experian’s credit report repository. The tool can be accessed by registering on the Experian website.
Getting started with Experian Boost
How effective is Experian Boost ™?
Experian Boost by the Numbers
Experian conducted a study to determine the effectiveness of Boost. Here were the results:
- Two out of three: Average values improved
- 10%: The number of consumers who previously had insufficient credit was rated after using Experian Boost.
- 75%: The percentage of consumers with FICO scores less than 680 whose credit scores were improved with Experian Boost
- 14%: The percentage of consumers with a credit score of 579 and below who saw their credit scores improve to between 620 and 679.
- 5 to 15%: Percentage that has moved to a better rating category depending on the credit level.
Experian Boost Results
These study results show that Experian Boost can improve your credit score, especially if you have a thin credit history. However, the results can vary from user to user.
While Boost calculates your score based on the FICO 8 model, a lender can use a different type of score to determine your eligibility for a credit facility.
However, increasing this score could remove huge barriers for those looking to improve their financial health. This tool isn’t just beneficial for consumers. It also helps lenders make more informed credit decisions after seeing consumers’ payment history.
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Can You Benefit From Experian Boost ™?
Who should use boost
According to Experian, Experian Boost would be ideal if you have fewer than five trading lines and a credit score between 580 and 669.
However, any credit-active consumer can benefit from the tool to increase the score. In fact, at least 66 percent of consumers will see an improvement in their credit score after using Experian Boost.
Here are some specific groups to consider Experian Boost:
- Consumers with incomplete or subprime credit scores: These individuals can increase their scores when applying for credits and lines of credit.
- Young adults: If you are looking for credit / credits that don’t have much to show in terms of credit history, you will find Experian Boost extraordinarily valuable.
- Responsible consumers: Those whose good financial habits are not reflected in their current credit report could qualify for various credit and credit products.
How you can benefit from Experian Boost
To benefit from Experian Boost, you need an online bank account. You must also allow Experian to scan it electronically. Experian will work with a financial technology company, Finicity, to verify bank statements for qualified payments.
You shouldn’t worry about the security of your data. The system does not change your personal information as it uses read-only access. Also note that you can revoke the permission granted to Experian at any time.
That means you are in complete control and can only grant access to your accounts when you need to use Experian Boost.
Alternative to Experian Boost ™
Another easy way to boost your credit score is with UltraFICO, which is also geared towards serving thin file customers.
How UltraFICO works
By evaluating cash balances, UltraFICO can help many consumers who otherwise have no credit or have difficulty building credit. The aim is to give those who have no or insufficient credit the opportunity to build it up by demonstrating that they can manage their money accounts.
Like Experian Boost, this platform also needs access to your bank account information in order to analyze your financial behavior.
UltraFICO does not investigate your telecommunications and utility payments. It will check your savings and whether your checking account has any overdrafts.
It’s worth noting that this platform will initially be rolled out in a smaller pilot program before fully launching in mid-2019. That means it could take a few years for UltraFICO to be widely adopted by lenders.
Your creditworthiness can have a significant impact on your financial health. It will determine whether you are eligible for a loan or credit product and what interest rate you will pay. If you have a low credit score, you may not be eligible for a loan or credit product.
Experian Boost, developed by the Experian credit bureau, can help improve your score, especially if you haven’t taken out significant credit or had credit cards on your own behalf.
You must give Experian permission to connect to your bank accounts and access your telecommunications and utility payments. You can then review the information and confirm that you want to add it to your Experian credit card. You will then receive an updated credit rating in real time.
With an improved credit score, you have a higher chance of getting approved for a credit card or loan, and save some money with lower interest rates.
If you’re looking for more ways to quickly increase your credit score, check out this helpful guide to get started.
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–Note – Results may vary. More information is available on the website.