By tracking your utility payments, eCredable adds an extra element to your credit report, which can significantly increase your TransUnion score.
Building credit is more of a marathon than a sprint. You’ll need to pay your bills on time long term and prove that you can successfully manage different types of loans and lines of credit without racking up too much debt.
That said, there are some ways to jump start the process. These include getting on someone else’s credit card account as an authorized user, signing up for Experian Boost and lowering your credit utilization ratio.
The tactic that I want to focus on today is signing up for eCredable Lift. It’s an Experian Boost competitor that I believe has even more to offer. eCredable pulls utility information into subscribers’ TransUnion credit reports. Using traditional methods, these do not typically contribute to a consumer’s credit history.
eCredable supports nine different categories: power, gas, water, waste, mobile phone, cable TV, satellite TV, internet and landline phone bills. eCredable CEO Steve Ely says the company’s typical customer adds three utility accounts to their TransUnion report. The service costs $24.95 per year.
See related: How to improve your credit score
How it works
eCredable is an accredited data furnisher that can potentially add up to 24 months of utility payment activity overnight. It requests subscribers’ utility login information and uses that to determine whether or not payments were made in full and on time. These accounts get added directly to the consumer’s TransUnion credit report and are included in the popular FICO 8 and VantageScore 3.0 scoring models.
While I’m generally not a big fan of paying to build credit – there are plenty of free ways to accomplish this – eCredable might be worth it for some people. The most rapid potential improvement is for people who don’t have enough of a credit history to generate a credit score.
An eCredable/VantageScore study found this sample consumer might expect to go from no credit score at all to a very solid 736 just by adding three utility accounts – assuming the payments from the last 12 months are made on time. That’s incredible. It would take them from a standing start to in the running for the vast majority of credit cards. By the way, Ely notes that Experian Boost does not work for people with no credit because it requires a credit report to get started.
An older American whose credit history has gone dormant might also benefit from this. eCredable and VantageScore speculate that this individual could see an 88-point improvement (from 675 to 763) after adding three utility accounts with 12 months of on time payments to their account.
When derogatory information is present, eCredable is much less impactful, but that makes sense. On-time utility payments can’t outweigh serious delinquencies and maxed-out credit cards. The best candidates are people whose lack of recent credit is holding back their credit score, not people who have derogatory marks.
eCredable and Experian Boost
Experian Boost, which is free, requests users’ bank account information and monitors utility payments from there. Ely says this doesn’t provide as much detail as eCredable’s approach and that some lenders are skeptical because Experian Boost is easy for a user to disconnect (if, for example, it’s hurting their credit score).
That runs contrary to the typical credit reporting formula. Say you pay your credit card bill late – you can’t just hit a button to make that disappear from your credit report. Lenders want the full picture of potential risks.
Still, the way I see it, there’s ample room for both services. Experian Boost only affects Experian credit reports, and eCredable only works with TransUnion. Those credit bureaus each contract with approximately one-third of the lending industry, according to Ely, and Equifax (which does not currently have a comparable tool) provides data to the remaining third.
If you’re a consumer looking to improve your credit, you could benefit from signing up for both services. Before you apply for a loan, it’s not always easy to tell which credit bureau your lender will pull from. Sometimes you can find out by asking the lender or scouring online message boards for other consumers’ experiences.
See related: How I improved my credit score
Especially if you’re new to credit, programs such as eCredable and Experian Boost can give you credit for paying bills on time. These behaviors haven’t traditionally counted towards credit but could give consumers a head start on building a strong credit score.
Have a question about credit cards? E-mail me at firstname.lastname@example.org and I’d be happy to help.