Does Experian Boost work? And is it safe?

Experian Boost claims to be an easy, fast way to boost your credit score – without the need for additional credit. If this sounds too good to be true, your first question is probably: Does the Experian Boost work? It soon followed: Is it safe?

One of the biggest paradoxes in personal finances is that of creating credit. If you do not have credit (or worse, bad credit) it is difficult to get new credit. But you need credit to build your credit.

Experian Boost aims to tackle the problem by looking outside the realm of credit. No matter how much credit you have – or do not have – we all have accounts. With Experian Boost, you can turn these accounts into a viable credit history.

What is Experian Boost and how does it work?

For years, credit bureaus have ignored all the people who do not have credit cards or loans. You can pay your electricity bill and cell phone service on time every month for decades and not have good credit.

That is changing now. Experian Boost uses your bank account history to track all of these unpaid utility payments and service accounts. This positive bill payment history is then included in Experian credit reports, possibly boosting your credit scores. And best of all, it’s free.

To use Experian Boost, just go to the Experian website and sign up. You will provide your bank account details and allow Experian to scan your payment history. You can then verify and confirm the information you want to add to your report.

Your Experian credit scores will be updated as soon as you complete your Experian Boost registration. According to the company, the average user received a 13 point increase in the FICO® Score 8.

Unfortunately, rent payments are not included. But Experian Boost can find and include a variety of different accounts, such as home utilities and communication services:

  • Water
  • Gas
  • Electric
  • Cable
  • Phones
  • Mobile phones
  • Flow services

Yes, you read the last one well. Several important streaming services have been added to Experian Boost, such as: Netflix, HBO, Hulu and Disney +.

Most major utilities are recognized by Experian Boost. However, if an account is not recognized, you have options. Boost will take you to a Q&A form to determine why the account is not recognized. If you still believe that the account must qualify, you can submit your account information to Experian for internal audit.

A positive payment history of up to two years may be included. However, you must have made at least three payments to your account in the last six months.

Can Experian Boost help your credit?

The short answer is: maybe. How much (or even) Experian Boost helps your credit rating will depend a lot on your existing credit history. For example, if you already have a strong enough credit history, then you are unlikely to see a huge amount of credit push by adding additional utility data.

On the other hand, people with no or limited credit history could benefit from the Experian Boost. If you do not have enough credit history to qualify for an Experian credit score, the additional payment history could help you qualify. You can also see a benefit if you have a low credit score due to your limited credit history.

According to Experian, 10% of people with thin files are eligible for credit scores after using Boost. The company also says that Boost improved the scores of 75% of people with a FICO® score below 680.

One thing to note is that Experian Boost only works with your Experian credit report. You have credit reports from the other two consumer credit bureaus: TransUnion and Equifax. Experian Boost data will have no effect on your other credit reports. It is difficult to predict which credit bureau a lender will ask. If they get your credit history and rating from TransUnion or Equifax, Experian Boost data will not help.

On the plus side, the Experian Boost data will be valid for most credit rating models that use Experian credit reporting. This includes your basic FICO® rating, as well as more specific ratings such as FICO® bank card ratings and FICO® automatic ratings.

Is Experian Boost safe to use?

Whether Experian Boost will really help your credit may vary. Even if it does not help you, however, Experian Boost will not help you wound your credit score.

For one thing, Experian Boost looks at your bank details, not your credit history. This means that there is no credit research. In addition, Experian Boost only includes timely payments, which add a positive payment history. So this bill that you paid three days late last year will not be included.

That being said, it is important to keep in mind that failure to pay utility bills or other bills can damage your credit score. But this will happen whether you use Experian Boost or not.

If you stay behind for more than 60 days, your provider can report your account as overdue to the credit bureaus. Payment history is 35% of the FICO® rating. Therefore, late payments can seriously damage your credit. Additionally, negatives, such as late payments, can stay on your credit reports for up to seven years.

Who should use Experian Boost?

Experian Boost is best for people without – or very limited – credit history. So if you do not already have credit cards and / or loans, you could see some benefits.

Basically, you need at least six months of credit history reported to credit bureaus to qualify for a FICO® Score. If you do not have enough history, you are considered “not graded”. Boost can help you complete your credit history. For some users, the extra data may be enough to qualify for a credit score.

If you already have a credit history, but not much – like an individual credit card or loan – you can also take advantage of Experian Boost. Extra payment history can help shape your credit record and improve your credit score.

As credit scores increase, so do the benefits of Experian Boost. While 87% of people with “very bad” scores increased, only 63% of people with “fair” scores improved. People who already have good credit will probably have little to no benefit.

Other ways to build credit

No matter how well Experian Boost works for you, it is not a complete solution for building credit or repairing credit. You are not going to go from not having a credit score to a great credit score just by paying your utility bills on time.

The best way to build your credit history is to use credit responsibly over time. This includes paying off your credit cards and loans on a monthly basis. You should also focus on keeping your credit usage low (how much credit you use relative to the amount you have available).

However, you need credit to build credit. If you have difficulty getting started, there are some methods you can use.

Open a secure credit card

Lack of credit (or bad credit) can make it difficult to obtain a regular, unsecured credit card. Secured credit cards are much easier to obtain because they require a cash deposit. This protects the credit card issuer if you are unable to repay your balance.

With most insurance cards, the size of your deposit will dictate the size of your spending limit. For example, if you make a $ 200 deposit, you will usually receive a $ 200 spending limit.

Apart from deposit, credit cards work in the same way as unsecured cards. You can use them to make purchases, including online shopping. You will then receive a bill each month.

If you pay your credit card bill every month on time, you will create a positive payment history. Over time, your credit scores will improve. Most secure credit cards will upgrade you to an unsecured card once your credit has improved. When your account is upgraded – or closed in good condition – your deposit will be refunded in full.

Get a credit card

Credit loans are a new addition to the credit world. They are specifically designed for people who need to build credit or rebuild bad credit.

Unlike a regular personal loan, a credit building loan does not give you money in advance. Conversely, when you take out a loan to build credit, the money goes to a locked savings account. You will then make monthly loan payments (including interest) for the duration of the loan. Once you have paid off the loan in full, you will have access to the money in the account at the end of the loan period.

The loan – and your payments – will be reported to the credit bureaus each month. If you make your payments on time, you will create credit and improve your credit scores.

Credit loans usually have short-term maturities ranging from six months to 24 months. They are also quite small, with loan amounts averaging between $ 300 and $ 1,000. This helps keep monthly payments small. (The point is to create a positive payment history. The size of the loan is not important here.)

Become an authorized user

Each credit card has a primary cardholder. this is the person who opened the account. However, many credit cards also allow authorized users. If you need to build credit quickly, this may be the best option.

Authorized users are a bit like guests, but for credit cards. Users receive a card with their name attached to the account. You can make purchases as if the account were yours – but it is not. You are not the account holder and you are not financially responsible for this. Also, you can not close the account, change account information, or take any other action.

Although authorized users are not responsible for the account, this does affect. This is because most publishers report the account to the credit bureaus for both the owner and any authorized users. If the account is old and in good condition, this can help the authorized user by adding to their credit history.

The other side of the coin is that the authorized user could cause problems for the account holder. If the user spends too much, the main cardholder is the one who pays – literally. The account holder is the one who is legally and financially responsible for the payment of the debt.

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