A reader wonders if giving Experian their bank account information raises privacy and security concerns.
How safe is it to give access to your bank account information to a third party?
A reader using the pseudonym “thisisreal” writes that they are skeptical about handing over access to their bank account information to Experian, so as to provide input for the credit bureau’s Experian Boost tool. They would like to sign up for this service and potentially see their credit score rise.
But what if they decide to unsubscribe from the service and unlink their bank account? What sort of privacy and security protection does Experian offer, once a subscriber gets off Boost?
See related: Tech lobbying efforts likely to shape federal data privacy legislation outcomes
Alternative input helps view the bigger picture
For those who are unaware of how Experian Boost works, you might be wondering why you need to hand over your bank account information to a credit bureau.
Traditionally, credit bureaus have not included your payment history on utility, phone, cable and Internet service bills in figuring your credit score. By giving Experian access to your bank account information, the credit bureau can factor in such payments to its Experian Boost tool.
If you have a good track record on these payments, you could see your FICO credit score rise.
This additional input could help those who don’t have much of a credit history, or are just beginning to take on credit and build up their credit records. Since your payment history is a big part of your credit scores, these additional records could provide a significant boost to such individuals.
According to Experian, the Boost tool only considers a positive payment history on such accounts, so that you are not penalized in case you haven’t maintained an exemplary record with these payments. And a longer account history, combined with on-time payments, is also a positive for your score since credit scores are also affected by how far back your accounts go.
According to Experian, more than 1.3 million Americans have signed up for the Boost tool since it was launched in early 2019. And more than 840,000 people have seen their scores rise as a result.
In fact, the credit bureau reports that 87 percent of those with a meager credit history have received a boost to their Experian-generated FICO scores.
Security and privacy issues
That’s all well and good, but how secure is your bank account information in Experian’s hands?
Experian spokesman Greg Young explained, in emailed comments, “Experian Boost data is protected throughout the process by multiple layers of protection. Additionally, consumers are in total control of the experience. They actively permit sharing of their credentials – the same information that is requested when using, for example, financial planning and account monitoring products. And, they can discontinue the connection to Experian Boost at any time.”
It seems Experian can only read your bank statements to find qualifying payments you make, and does not store your bank account information.
If you decide you no longer want to continue with the Boost service, Experian ends access to your bank account and doesn’t continue to read your transaction information.
However, Young noted, “Experian keeps previously contributed data to support consumer needs, such as disputes, and to gain insights that can make the product better for consumers. The data may also be analyzed for the purpose of developing new Experian products that benefit consumers. Any additional uses of the permissioned data would require specific authorization by Experian Boost users.”
Not a slam dunk
Reader “thisisreal” muses, “if something is too good to be true, it usually is.” Well, Experian Boost is certainly not a slam dunk, and has its risks.
Your credit score may not benefit from this tool, and could even go down after the additional information is factored in. Experian encourages people who don’t see an immediate boost to wait a while and see if a positive effect sets in over time, as your payment history grows.
Besides, if you are looking to raise your score before applying for credit, you don’t know if your lender is using an Experian-generated credit score. The lender could be looking at a score generated by another credit bureau, or even a different version of your Experian-generated score that did not access the Boost tool.
And even after you discontinue with the Boost service, you might face the typical data breach risk, as with all other online input. For instance, a 2017 data breach at Equifax, another credit bureau, exposed the personal information of more than 147 million Americans.
“thisisreal,” it seems Boost has its benefits, but only you can decide if it’s worthwhile to sign on.