A good credit score can affect everything from your approval chances for a credit card to your ability to rent an apartment, so it’s to your advantage to build the best score possible.
If you don’t have much of a credit history but you do have a track record of making on-time bill payments, Experian BoostTM can help you use that information to boost your FICO® credit score.
By adding phone and utility payments to your Experian credit file, Experian Boost gives you more opportunities to prove that you can handle your finances responsibly. This, in turn, can give you better financial options in the future — from lower interest rates to higher credit card rewards.
Here’s a closer look at Experian Boost to help you decide whether it’s the right tool to help you build your credit.
How does Experian Boost work?
Experian Boost is a free tool that allows you to add telecommunications-related and utility payments to your Experian credit report. When you connect your bank and credit card accounts to Experian Boost, Experian will scan the account for any payments made to the phone or utility companies you have identified during enrollment. From there, you can verify the account(s) you’d like to see added to your Experian credit file. If you have at least three months of positive payment history within a six-month window, you could earn an immediate FICO credit score boost.
In most cases, your credit report only tracks payment history on credit accounts, like credit cards, student loans, car loans and mortgages. If you do not have any credit accounts — or if you have a poor payment history on your existing credit accounts — Experian Boost can help you build out your credit report and increase your credit score by showing proof that you can manage other accounts responsibly.
Does Experian Boost report to all three credit bureaus?
Experian Boost is part of Experian, one of the three major credit bureaus. When you use the tool, it can improve your Experian credit report and your FICO credit score, but Experian Boost does not report to TransUnion or Equifax, the other two credit bureaus.
This means that if a lender requests a credit inquiry from TransUnion or Equifax, they won’t see the boosted credit score or credit history you’ve built with Experian Boost.
Can Experian Boost improve your credit?
According to Experian, 61 percent of Experian Boost users were able to improve their credit, and the average user raised their FICO credit score by 13 points. People that had poor credit when they began the Experian Boost process were even more successful; 86 percent of users with a credit score of 579 or below improved their credit with Experian Boost, with an average credit score increase of 21 points.
Many Experian Boost users also moved to a higher credit score range. Sixty-four percent of users who saw a range increase went from poor credit to average credit, and 25 percent went from average credit to good credit.
Moving into a better credit score range can help you when it’s time to apply for a new credit card. Credit cards for people with good credit tend to offer lower interest rates and better rewards than cards for those with fair or average credit. If you have poor credit or no credit history, you might only be eligible for credit cards with low credit limits and few rewards.
Who benefits most?
Experian Boost is designed to benefit those with no credit history or limited credit history, also known as “thin file consumers.” If you have fewer than five credit accounts in your credit file, linking Experian Boost to your bank account can help bulk up your credit file by showing proof of responsible bill payment.
Improving your credit history through Experian Boost can help you earn the FICO credit score you need to apply for new lines of credit. While adding phone and utility payments to your credit history is a good way to get out of “thin file” status, eventually you’ll want to build credit by opening a credit card.
How long does it take to see an improvement to your score?
Experian Boost factors up to the last 24 months of payment history into your credit report and credit score — so if you already have a credit file (even a thin one) and a history of responsible bill payments, you could see a credit score boost right away.
If you start using Experian Boost without any previous credit history but a credit file exists, it could take around six months to build out your credit report and get your first FICO credit score. Your credit score can continue to improve as you build a history of responsible credit use.
Advantages of Experian Boost
The program comes with a number of advantages, including the opportunity to quickly improve your credit score by giving Experian access to your telecom and utility payments. If you don’t have much of a credit file or have never opened a credit card before, Experian Boost can help you establish the credit history you need to rent an apartment or request a new line of credit. In fact, Experian Boost is one of the few ways you can build credit without a credit card.
Disadvantages of Experian Boost
Some may worry that recent security breaches, such as the Equifax hack of 2017, could make tools like Experian Boost more risky. Keep in mind that even though you are giving Experian access to your bank account, Experian does not store any consumer bank credentials — it only stores qualifying phone and utility payment records. If you are still concerned about security risks, you might want to consider a credit monitoring service to keep track of data breaches and watch for signs of potential identity theft.
You should also keep in mind that Experian Boost is only one way of improving your credit score, and it only affects your Experian credit file. You might be able to improve your credit score with all three credit bureaus simply by maintaining a history of on-time credit card payments while keeping your credit card balances as low as possible.
Bottom line: Should you use Experian Boost?
If you have poor credit or a limited credit history, Experian Boost could help you improve your Experian credit file and FICO credit score as long as you are making regular, on-time payments to phone and utility companies. If you do not have cell phone or utility accounts under your name (maybe you’re splitting the bills with your parents or your roommates, for example), you might not have enough positive payment records to benefit from Experian Boost.
Experian Boost can also help you quickly build your FICO Score 8, should you have a positive history of bill payments. You might even move up into a new credit range, making you eligible to apply for credit cards that offer lower interest rates and better rewards.
Ultimately, you’ll want to build your credit score by proving that you can manage credit responsibly. Until then, Experian Boost is one way to give your credit file the boost it needs.