Building a great credit score isn’t easy, especially if your credit profile is thin. But a new platform from credit bureau Experian, called Experian Boost, could be your solution to a higher credit score even with no established credit or a limited borrowing history.
The free online platform allows consumers to potentially raise their credit scores by connecting online banking data and allowing access to utility and telecommunications payment histories. The tool is designed to help your score become a more accurate reflection of your overall financial responsibility.
“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.”
How to sign up for Experian Boost
The program is completely voluntary, meaning you must opt-in to take part. If you choose not to, your score (from Experian or any other bureau) will not be affected.
From Experian’s website, you can sign up and connect the bank account you use to pay your phone and utility bills. After verifying the positive payment history that you want to add to your score, Experian says you’ll be able to see the results in your score instantly.
Keep in mind that the FICO Score provided by Experian uses the FICO Score 8 model. If your lender uses a different FICO Score, you may not see the impact from Experian Boost reflected in the score.
How Experian Boost works
Experian Boost uses your online bank account information to access 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.
The program looks for eligible payments that you’ve made over the past 24 months. Only positive payments are considered, and you can remove the data from your credit report at any time.
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.
Will Experian Boost increase your score?
One of the most influential factors in determining your credit score is the length of your credit history, which can negatively impact young people or those with limited experience using credit cards or taking on loans. Experian Boost may be especially useful for these consumers who wish to apply for lines of credit and loans but have a short history.
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.
Experian’s pilot testing after the platform announcement found that, depending on credit tier, 10-15 percent of consumers moved into a better score category and that the average FICO Score increased by more than 10 points after using Boost.
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.”
A higher credit score can help you qualify for lower-interest loans and pay off your debts more quickly. You may also be able to qualify for credit cards with premium rewards and better interest rates. But reaching above a 750 or even 800 score takes time and patience.
Opting into Experian Boost doesn’t mean you should forgo good credit practices like keeping your utilization rate low or making consistent, timely payments in full, but it can give you the boost you may be looking for in the short-term.
If you don’t mind exchanging your banking information for a few points added to your credit score, or you have a thin credit profile that you’re looking to pad with more information without taking on more debt, Experian Boost can be a great solution.