If you’ve ever checked your credit score, you’re probably already familiar with Experian. But have you heard of Experience boost? Let’s see what it is and how it can help improve your credit score.
What is Experian Boost?
It’s a new service from Experian launched in the UK in November. It allows you to share information about your regular payments with specific service providers and accounts.
If you make these regular payments and spend less than what you earn, you could be rewarded with an instant increase in your credit score.
How it works?
You need to sign up for the service, which is free.
As part of the process, you authorize Experian to access data for the last 12 months in your bank account. This is done in accordance with “Open Banking” rules.
Experian Boost uses this data to get an up-to-date picture of your spending habits. If you regularly pay your bills on time and spend within your means, Experian will use it to boost your credit score.
What types of payments will be recorded?
The service has three types of payment:
Municipal tax payments
Digital entertainment subscriptions – including payments for services such as Netflix, Spotify and / or Amazon Prime
Payments to savings accounts – including ISAs
The service also monitors the total amount paid and withdrawn from your account.
Experian Boost does not monitor other transactions, such as credit card. However, transactions such as credit card payments are already posted when you check your normal credit score. This service should therefore be treated as an additional supplement.
Who will benefit from this service?
Anyone looking to improve their credit rating or anyone with a non-existent credit history.
If you already have a good credit rating, you are unlikely to take advantage of it.
What are the advantages and disadvantages of using this service?
Using Experian Boost will not damage your credit score. It ignores any information that could negatively affect your score and will not share that information with other financial companies.
However, the service is still fairly new and some financial companies have yet to confirm that they will take this information into account when assessing.
You will only benefit fully from it if your household bills are paid into your account. So if you live in shared accommodation where someone else pays all the bills, you won’t get as much out of the service.
You must be comfortable with Experian to access your bank account. While this may discourage some people, access will last up to 90 days. After this period, you can withdraw your authorization. You can also choose to stop the service at any time.
How long will I see the results?
Experian says the application process takes around five minutes and your credit score should change instantly.
If you want to use this service, it is probably best to use it as part of a longer term strategy to improve your credit score. Building and maintaining a good credit rating takes time and patience.
At this point, it’s hard to gauge how quickly Experian Boost will really influence your credit score.
Bring back home
Experian Boost is a relatively new service, so its positive effect on a credit score is difficult to assess.
It might be worth waiting at least for more financial institutions to start recognizing these scores as part of their assessment of your credit history before trying it.
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