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Experian offers a way to raise your credit score in real time

Summary

Experian has launched a new program that allows the credit bureau to access your on-time mobile phone and utility payments, potentially raising your credit score in real time.

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If you’ve been dreaming of a way to instantly raise your credit score, that could soon become a reality.

Experian on Dec. 18 launched Experian Boost, a platform that could enable you to hike your credit score immediately, and for free.

The new platform allows consumers to grant Experian permission to connect to their bank accounts and gain access to their mobile phone and utility payments. Once you authenticate the data, you simply confirm that you want Experian to add it to your credit file. Next, you’ll get an updated FICO score in real time.

Utilities and telecommunication providers generally don’t report customers’ positive payment histories to credit bureaus. But Congress last year passed a bill that would clear the way for more reporting of on-time utility bill payments.

“We are committed to financial inclusion, and Experian Boost is the latest example of our efforts to increase consumer awareness of credit’s impact and value while giving them greater control,” Brian Cassin, CEO at Experian Global, said in a news release.

See related: Chase considers rewarding customers for boosting their credit scores

New program can benefit consumers with thin credit files

Experian said consumers with fewer than five trade lines and scores between 580 and 669 would likely benefit most from its new platform. An initial analysis by Experian of the platform’s impact on a sample of consumer FICO scores revealed:

  • The score’s risk predictiveness was maintained.
  • Two out of three credit scores improved.
  • 10 percent of thin-file consumers became scoreable.
  • For consumers with a score below 680, 75 percent saw an improvement in their credit scores.
  • 14 percent of consumers with a credit score at or below 579 moved to a score between 620 and 679.
  • Depending on credit tier, 5-15 percent moved into a better score category.

Because consumers with low credit scores often get stuck with higher interest rates when they gain access to credit, Experian Boost’s impact could be significant.

A consumer with a subprime credit score will typically pay around $200,000 more over his or her lifetime than a consumer with a good credit score, according to Credit Builders Alliance. For instance, if your FICO score is 720, you’ll pay $4,020 less for a five-year, $10,000 auto loan than someone with a 500 score. That translates into a savings of $67 a month.

Raising that score could remove large barriers for those hoping to improve their financial health. And lenders may also benefit from Experian Boost – they can make more informed lending decisions when they see consumers’ payment histories.

Users’ results may vary. The platform calculates your score based on the FICO 8 model, but a credit card lender might use a different FICO score – or another, completely different type of score – to make lending decisions.

Consumers will get access to Experian Boost in early 2019, but you can register for early access by visiting the platform’s website. Experian said those who sign up will also receive a free credit report and FICO score.

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