A new program from Experian could lead to higher credit scores for millions of consumers, particularly those without a long borrowing history.
Experian on Tuesday announced the launch of Experian Boost, an online platform that allows consumers to potentially raise their credit scores by connecting their online banking data and allowing access to utility and telecommunications payment histories.
“We saw an opportunity to allow consumers with incomplete credit profiles or subprime credit scores to more accurately portray their financial histories,” says Jeff Softley, chief revenue officer of Experian Consumer Services. “We think that this is a positive way for consumers to establish and build their credit profiles.”
Experian Boost will be released in early 2019, but Experian is offering early access to consumers who register for the early waiting list at Experian.com/Boost beginning Tuesday.
How Experian Boost works
Experian Boost uses your online bank account information to access your payment history for common utilities like water, electricity and cable, as well as landline and mobile phone payments.
“It’s really a simple process where the consumer is always in control,” Softley says.
You would begin by registering for a free account so Experian can validate your identity and provide your FICO Score. Then, you would connect your online bank account like you would for a digital budgeting tool, Softley says.
“This allows us to look for eligible utility or phone payments that the consumer has made over the past 24 months,” he says. “The consumer can then add those payments directly into their credit report, and this information would be factored into their credit status instantly.
“Only positive payment histories will be aggregated through the platform, and consumers can remove the new data at any time,” according to Experian’s press release. If you pay your utilities using multiple bank accounts or transfer to a new bank in the future, Softley says the platform makes it easy to add or remove multiple accounts from your profile.
Who can benefit
Experian predicts consumers with fewer than five trade lines and with scores between 580 and 669 are likely to benefit the most from Experian Boost. But they recommend the platform for all credit-active consumers.
“About two-thirds of consumers will see an improvement in their credit score,” Softley says.
A credit score boost through Experian Boost may help users with incomplete or subprime credit scores when applying for lines of credit and loans.
Ted Rossman, industry analyst for CreditCards.com, says Experian Boost “is particularly advantageous for young adults who may be interested in applying for credit but don’t have much of a credit history.”
For those responsible consumers who are frustrated that their good financial habits aren’t reflected in their current scores, “Experian Boost will start rewarding people for those positive payment behaviors, which should help them qualify for credit cards, auto loans and other forms of credit,” he says.
Rossman also compares the platform to the UltraFICO program announced in October.
“I like this even better than UltraFICO — with UltraFICO, access to your banking history and balance seems like it could be a slippery slope,” he says. “But with Experian Boost, it’s all about showing you’ve paid recurring bills on time, which is a natural fit for building solid credit.”