Building a quality credit score takes a lot of planning, time, and patience. You need to go step by step, keeping in mind the long-term financial repercussions of every action you take. In today’s time, economic needs can be very uncertain, requiring you to have an acceptable credit score at all times to borrow money at feasible interest rates.
Keeping in mind today’s fast-paced requirements, many leading credit bureaus and risk assessment companies have developed products to boost credit scores in a short period. One such product is the Experian Boost which is developed by Experian, one of the top credit bureaus in the United Kingdom.
Let’s find out how Experian helps your credit scores and how you can use it to improve your chances of getting quality loans.
5 Things You Need To Know About Experian Boost
What Is Experian Boost?
The UK based credit bureau Experian has launched a unique product known as Experian Boost. This feature allows you to boost credit score using utility payments like internet bills, phone payments, and electricity bills, which are typically not factored in your credit score reporting.
Experian has identified a strong correlation between your utility payments and loan defaults. This discovery has helped to create a proven method to boost scores. This method is also recognised by the leading credit risk assessment company FICO.
How To Apply For Experian Boost?
To start using it, visit the Experian Boost webpage and register yourself for the product by filling out all your personal and banking details.
This is how you go about it:
- Create an account with Experian: This is necessary for you to access the Experian Boost service. It is free of cost and does not require any prior membership with Experian.
- Add personal information:You will then be required to fill out all your personal details, including tax identification numbers and other data which you typically fill out while requesting your credit report.
- Add banking details:Finally, add your bank account. You can add more than one account from different banks in your credit profile. The process is straightforward; if you already have a dedicated banking app, you will be transferred there to verify yourself before you proceed to link your account with Experian Boost.
How Does Experian Boost Work?
Once you’re done adding all your personal and banking information, Experian starts looking through your bank account statements and pulls out all payments made against utility bills. It only goes through your positive payments, meaning nothing negative will be considered into the credit boosting process.
Experian uses a financial data aggregator to make all the necessary correlations between the Experian credit report, your bank, and the credit scoring model used by Experian, known as VantageScore.
It loads up all your utility payments like gas, cable, landline, and internet that were made in the past 24 months, from the point of registration. Essentially, any bill payment on your bank statement that can be identified as a utility bill will be added.
What Can I Expect From Experian Boost?
Once you connect your bank accounts, you will start seeing your results almost immediately. Your Experian credit score will increase in real-time, depending on the type and amount of utility bills that are reflected in your bank account statements.
Even though it’s not the best escape route to an improved credit report, it does help in significant ways. Every time you make a timely utility payment, it will instantly reflect in your credit score, which helps your chances of getting a short-term 500 loan.
What Should You Keep In Mind While Using Experian Boost?
Even though Experian Boost uses a credit scoring model that is used by other credit bureaus as well, the boost factor will not reflect on the credit reports generated by other bureaus in the country like Equifax or TransUnion.
The Experian credit score calculated through Experian Boost is based on the FICO Score 8 model. This works well with FICO 9, VantageScore 3, and VantageScore 4. These credit scoring models are used and operated by all 3 top credit bureaus in the UK.
So, if you are relying on your Experian Boost score to get a good low-rate loan from any lender in the UK, that might be a problem for you as not all lenders use the Experian Score for their credit risk assessment.
The other problem that could arise is that many lenders are still not able to read utility payments as positive payments in your credit score. They automatically assume that your utility payments are a part of the debt load, which can affect your chances of qualifying for a loan or a credit card.
Experian has given a statement saying that it is collaborating with lenders across the country to help them acknowledge utility payments as positive payments.
How Does Experian Boost Compare To Other Boost Products In The UK?
Apart from Experian Boost, there are several other products which work in a similar fashion to help users boost credit scores using positive payments. Here are a few products available;
- UltraFICO:Developed by FICO, this product links with your savings or checking account to analyse your bank balances. It checks whether you consistently have cash on hand and for how long your bank accounts have been open. This also includes the negative payments made through your bank accounts, unlike Experian Boost, which only uses positive payments.
- Credit Ladder:This product allows you to turn your rent payments into credit building blocks. It analyses your connected bank account (the one which you use for rent) for all your rent payments and factors them into the credit score. It is regulated by the Financial Conduct Authority (FCA) and is used by Experian and Equifax.
On the outset, experian boost uk works as a fast and safe way to keep boosting credit score. It only focuses on utility payments, which happen at least more than twice a month, and does not factor in your bank balance, average balances or your negative payments.