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When you’re starting out, getting a credit score can be maddeningly elusive. Many lenders are reluctant to extend credit unless you already have experience with credit. Credit bureau Experian wants to ease that Catch-22 for credit novices with a free product called Experian Boost.
Key takeaways:
Using Boost lets your streaming, phone and utility payments "count" toward your Experian credit score. Renters can also sign up to have eligible rent payments reported to the credit bureau.
Boost scans your bank transactions for the payments, and reports only positive payment info.
You must give enough personal data for Experian to access your accounts.
The idea is to help thin-file customers — especially those who have less experience with credit — by incorporating signs of responsible financial behavior that traditionally aren’t seen by credit reporting bureaus. Boost also may help people who are rebuilding credit after financial setbacks.
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To use Boost, consumers must sign up for a free membership on Experian’s website and grant permission to connect their online bank accounts. Boost then identifies streaming, utility, cell phone and rental payments. Once a consumer verifies the data and confirms they want it added to their Experian credit file, an updated FICO score is delivered in real time.
Information about payments will appear only in their Experian credit report and be used when certain credit scores are calculated from that data.
Boost counts only positive payment history, Experian says, so missed payments will not hurt your score. That’s different from how credit scores usually work, where missed or late payments are recorded in your credit report and can reduce your score.
What is included in Experian Boost?
Eligible payments you can add to your Experian credit file include:
Video streaming services such as Hulu and Disney+.
Bills must be in your name and may need to meet other criteria to qualify.
In addition to reporting bill payments, Boost users can:
Get a free FICO score and credit report.
Get a free identity scan to check if their personal information is at risk.
Get offers for financial products like credit cards, loans and car insurance.
Decide whether these features make sharing your financial details with Experian worth it.
Does Experian Boost actually build your score?
Boost may or may not help you build credit. When a lender checks your credit, it may pull your credit score or view your credit report from any or all of the three major credit bureaus, Experian, Equifax and TransUnion.
Boost can benefit the most common versions of FICO and VantageScore, Experian says. Lenders would see the effects of Boost only if they view your Experian credit report or pull those most commonly used credit scores using Experian data.
Experian acknowledges that Boost users may not see a bump in their scores. The company says that users who did get a bump received a 13-point FICO 8 gain, on average.
Boost vs. UltraFICO and eCredable Lift
Experian offers another product in conjunction with FICO, also aimed at helping thin-file consumers. The UltraFICO score also requires access to your bank account data to gauge financial behavior. Instead of utility payments, the score factors in how much you have in savings and whether you incur overdrafts in your checking account.
Boost competitor eCredable Lift can pull information from utility accounts. It reports utility tradelines to TransUnion, and it goes back up to 24 months. It requires credentials to connect to utility accounts, and can be useful even if the customer is unbanked or underbanked. It's not free, though. It costs $9.95 a month and affects only TransUnion credit reports.
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Other ways to build credit
Boost and UltraFICO influence only your Experian credit report and scores built using that data. You can do other things to strengthen your credit, and the effect of these steps can extend to all three credit bureaus:
Become an authorized user on someone else’s credit card. When someone with an established credit line adds you as an authorized user, you benefit from their good credit habits. Make sure the card reports authorized-user status to the credit bureaus.
Apply for a secured credit card. This starter card is backed by a deposit that also serves as your credit limit. It’s best to put a small, recurring charge on it and set up autopay. The small charge means you’re not using too much of your credit line, which can hurt your score. The automatic payment guards against a late or forgotten payment, which also can damage your score.
Use a credit-builder loan. Credit unions typically offer this type of loan, which builds your credit and savings at the same time. It requires a monthly payment that’s held in a separate savings account until you pay off the loan.
Use a rent-reporting service. Some companies offer to have your rent payments reported to the credit bureaus, allowing you to build your credit file.
Building credit takes time and patience, and it pays to track your progress. NerdWallet offers a free VantageScore 3.0 credit score as well as a free credit report from TransUnion.
Using Boost lets your streaming, phone and utility payments "count" toward your Experian credit score. Renters can also sign up to have eligible rent payments reported to the credit bureau. Boost scans your bank transactions for the payments, and reports only positive payment info.
Yes, if you receive a score increase when you add payments with Experian Boost, the increase will happen instantly. Any lender that uses the FICO® Score 8 with Experian data will see that change reflected in score results. Users of Experian Boost whose scores improve see an average FICO® Score increase of 13 points.
Your scores calculated based on your TransUnion or Equifax credit report or other credit scoring models are unaffected. May not count with some lenders: Some lenders may use credit scores that are not affected by Experian Boost.
The links power the Experian Boost and Personal Finances tools, and they're generally safe and secure. However, there's always a risk with sharing information, and you can unlink accounts at any time and request Experian to delete your personal data.
Experian vs. Credit Karma: Which is more accurate for your credit score? You may be surprised to know that the simple answer is that both are accurate. Read on to find out what's different between the two companies, how they get your credit score, and why you have more than one credit score to begin with.
Although there isn't a bank that exclusively uses Experian, some banks that typically use Experian data more commonly include American Express, Bank of America, and Wells Fargo.
Experian's free account includes your credit report and FICO® Score, and you receive ongoing credit score monitoring, so you can see how your score changes over time. You can also receive insights into the factors that are affecting your credit score the most and get tips on how to improve your score.
Highlights: While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.
As someone with a 650 credit score, you are firmly in the “fair” territory of credit. You can usually qualify for financial products like a mortgage or car loan, but you will likely pay higher interest rates than someone with a better credit score. The "good" credit range starts at 690.
It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.
Your score falls in the range of scores, from 800 to 850, that is considered Exceptional. Your FICO® Score and is well above the average credit score. Consumers with scores in this range may expect easy approvals when applying for new credit. 21% of all consumers have FICO® Scores in the Exceptional range.
And does Experian Boost really work? According to Ulzheimer, the unequivocal answer to both of those questions is “yes.” Boost is user-controlled, meaning you can add and remove bills any time you want. It's also free to use, even though the impact is limited to your Experian credit score and only your FICO Score 8.
You'll typically need a credit score of 620 to finance a home purchase. However, some lenders may offer mortgage loans to borrowers with scores as low as 500. Whether you qualify for a specific loan type also depends on personal factors like your debt-to-income ratio (DTI), loan-to-value ratio (LTV) and income.
Make all payments on time and avoid applying for new credit. Lower your utilization ratio by paying down balances, increasing credit limits, or consolidating your debt. Become an authorized user on an account with a long history of responsible use.
Credit scores from the three main bureaus (Experian, Equifax, and TransUnion) are considered accurate. The accuracy of the scores depends on the accuracy of the information provided to them by lenders and creditors.
Ultimately, whether it's worth paying for a premium Experian account or not will depend on how closely you need to monitor your credit record. Since a general overview of your credit score is free, if you only require a cursory look at your credit report then these premium features might not be worth the investment.
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