Experian Boost allows your positive history of paying utility and phone bills to be included on your Experian credit report and factored into your FICO score or VantageScore. Read on to find out how it works and when you can expect to see your credit score benefit from it.
Dear Keeping Score,
Do you know how I will be notified regarding getting enrolled in Experian Boost by using my utility and phone bills? Or if so, should I do something to help my process soon? Also approximately what date this will begin to happen? -Carl
Welcome to the brave new world of credit reporting and scoring! It wasn’t long ago that your credit file was developed using door-to-door interviews of your neighbors. Thank heavens that day has ended and issues of gender, race, ethnicity and more are no longer the basis on which credit is granted.
Launched in mid-March, Experian Boost allows your positive history of paying utility and phone bills to be included on your Experian credit report and factored into your FICO score or VantageScore.
The result: a “boost” to your credit score. Why is Experian doing this? It’s the classic idea of doing well by doing good. Experian Boost will help tens of thousands get better interest rates and products while at the same time allowing Experian to sell more credit reports.
How does Experian Boost work?
The Boost program is the result of in-house research by the elves at Experian’s data lab. They identified a strong correlation between paying utility bills and future loan defaults. FICO and VantageScore agreed with Experian and now these bills are able to be factored into your credit score.
Getting those extra points is easy. The free program is an opt-in one that you initiate by going to www.experian.com/boost. Once there, you will need to identify yourself. This is much the same process you follow to get your credit report online.
Once you prove you are who you say you are, you begin the process by adding your checking account information to your credit file. You can add more than one checking account from more than one bank. You can use a joint account, but you can’t use a business checking account.
Behind the scenes, Experian uses leading financial data aggregator, Finicity, to make all the connections between Experian, FICO, VantageScore and your bank. Most banks are already in the network, but some small ones are not. If your bank doesn’t connect with Finicity, just let them know and Finicity will reach out to the bank in question.
Here are a few great features of this program that make it a winner for everyone.
- First, it only grabs positive payment information; nothing negative in your checking account will show up.
- Second, it looks back 24 months from the get-go, so most people won’t have to wait for a payment history to be built.
- Third, it covers all kinds of utility payments like electric and gas, cable, cellphones, landlines, and even water bills if they are identifiable.
- Lastly, you can opt out at any time.
Who will benefit the most from Experian Boost?
So, what can you expect from using Boost? Well, the more lines of data you can supply, the better. Two utility or phone bills are better than one and four are better than three. Here’s who benefits the most:
- Those with thin credit files.The thinner the credit file (five or fewer accounts) the bigger the impact, but you need to have at least one open traditional account to get a score boost.
- Those new to credit (short credit history) or who just don’t have much in their credit file.
- Those with a score just below the next credit scoring tier.
Initial reports say increases of approximately 10 to 30 points are doable and the impact is almost immediate. During the sign-up process, Experian will give you a free credit report and score. Once sign-up is complete, you get an updated score right away.
Even people with top scores can add a few extra points, but the impact of moving from 800 to 805 is not as dramatic as moving from 680 to 700. The Boost data affects FICO 8 and 9, and VantageScore 3 and 4.
Keep in mind that this service is only available from Experian, so if a prospective lender only uses credit reports and scores from Equifax or TransUnion, Experian Boost may not help you get approved for a credit card or a loan.
See related: 10 tips to improve your credit score
Not the only credit-boosting product out there
This is exciting to those of us who are consumer credit advocates, and there is more good news. Experian also has Rent Bureau, which can report rent payments on your credit report.
Additionally, with the new UltraFICO score, you can get credit for good money management and saving habits. If you want to know more about these other programs, just ask me a question.
Remember to keep track of your score!
*Correction: As originally published, this article incorrectly stated that Experian Boost data affects FICO score versions released prior to FICO 8. See CreditCards.com’s corrections policy.