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How is Experian Boost Legal?

how is experian boost legal

Having a good credit score can have a major impact in your life from getting approved for a mortgage, getting that brand new car you have been wanting, getting the best credit cards and the best interest rates.

However, building a good credit score can take years and lots of work. In, early 2019 one of the major credit bureaus Experian created a tool called Experian Boost.

In simple terms, Experian Boost allows you to improve your credit score.

But how? Are you eligible to use the tactic to improve your credit score?

I have covered answers to several of your queries in this discussion. Read it till the end to get a solution to your questions.

While using Experian Boost, you provide Experian with your secured bank account details. Experian will monitor your bill payments and their regularity.

Based on the experience, Experian will calculate your credit score. But, the flip side is that some people might get a good credit score, whereas some don’t.

Many people might be able to update their credit scores. Many people might feel for the easy process of getting new credit.

But, though it is a good idea to do so, you must be careful about sharing your most crucial bank details with credit report agencies like Experian.

Let me take you through how Experian Boost works to support my understanding of Experian Boost and whether you can use it.

How does Experian Boost work?

how does experian boost work

As said before, if you wish to improve your credit score by having a thin credit file, you need to allow Experian to access your bank accounts.

By allowing Experian to access your bank accounts, you are allowing Experian to access your utility and telecommunication payments.

The information regarding your payments is then added to your Experian credit profile, thus renewing your overall FICO score.

Here I would like to talk about the UltraFICO score, which comes into the picture when you allow Experian to access your bank accounts.

Experian, along with the FICO score, provides us with one more entity called the UltraFICO score.

Experian has developed this product to help consumers with a lower credit score or a thin credit file, all the luxuries a person can enjoy with a large credit file. 

If you wish to get this score, you need to allow FICO to access your bank accounts. In this, UltraFICO score instead of looking at your utility and telecom payments, it will check,

  1. How long has the account been open?
  2. How much savings are done by the consumer?
  3. Whether the consumer pays the bills on time?
  4. Whether the consumer crosses any overdraft limit?

This information is then combined with the existing data of the Experian to create an UltraFICO score.

However, let me tell you one thing, you might be able to raise your credit score using Ultra FICO score, but you need to beware of any scam.

At this point, now that you know how Experian Boost works, you must know how much improvement in the credit score you can expect. 

How much Improvement can you Expect in your Credit Score using Experian Boost?

According to research done by Experian, 75% of the consumers who had a credit score below 680 saw an improvement in their credit score after using Experian Boost.

Additionally, the same research suggests that 10% of the consumers who had a very thin credit profile saw an improvement in their credit history, thus improving their credit score.

Experian’s early tests suggest that 8 million people can move into the fair & good credit score category using Experian Boost.

By looking at these numbers, if you wish to sign up on Experian, you can go ahead and do it. If you are still unsure, you can keep reading it further.

Will Experian Boost Help you Update your Credit Score?

improve credit score

As per my understanding about the Boost platform, Experian will only count the positive payment history to calculate your credit score.

In general calculation, late or missed payments severely affect your credit history, thus reducing your credit score. However, let us consider that Experian will just see your positive side of the payment history.

This approach created by Experian is a tactic where they help consumers to update their credit history, thus helping money lenders to give more credit to these consumers.

However, based on what your bank account shows and how Experian evaluates your activity, it might update your credit score or might not.

Also, you need to keep in mind that since you have opted for updating your credit score using Experian Boost, you might be eligible for all the loans & credit types from lenders who base Experian for their decision.

You might not be able to access the loans or credit types from lenders basing their decisions on other credit reporting agencies – Equifax and TransUnion.

There is a possibility that your lender might use a different kind of FICO score or another score altogether. They might not use the FICO score 8 model. In such a case, using Experian Boost will not give you any results.

Please note – Since July 27, 2020, you have been allowed to add your Netflix payment history to your Experian Boost accounts. Since its inception, you were only allowed to add utility, phone, internet, electric, gas, and water bills.

Just because you get credit, should you opt for it?

First of all, I am posting my review on whether to use such a scoring model or not. I am not favoring any scoring model, nor am I against any scoring model. Please take note of it.

A lot of people are worried about whether Experian Boost is legal or not. People do ask how Experian Boost is legal.

In such cases, I ask them a question: should you use Experian Boost just to make a lender give you credit?

Generally, a scoring system that considers utility & telecommunication payments as the basis to count your credit score is a good thing.

But a scoring model developed just to allow lenders to give you money or credit is concerning. 

Ultimately, you are the best person to know whether you are ready to take any debt or not.

Is it Secure to Use Experian Boost?

is experian boost secure

In 2017, a massive data breach happened at Equifax when about 147 million consumers were affected. In turn, they had to settle with around $500 million payment to be divided between those affected.

There might be several pros and cons of Experian Boost. But, providing access to your bank accounts to third parties, like credit reporting agencies, is a threat. It might be accessed by hackers if your day is bad.

Hence, I suggest you rethink whether you can provide your personal information to improve your credit score.

But if you have less credit history and want to develop a credit score, you might think to opt for it.

If you wish to go ahead with Experian Boost, I suggest you follow other guidelines simultaneously to improve your credit score.

What are the other ways to strengthen your credit score?

Let us consider that you have selected Experian Boost to improve your credit history. (By accepting the fact that Experian Boost is Legal) You might have to consider following the other ways I am mentioning here.

  1. By taking the help of the best credit repairing agencies, you can file disputes against the credit reporting agencies to solve errors in your credit history.
  2. You can plan to add positive information like your job details in your credit history that expresses your financial stability.
  3. Keep a habit of using your credit cards wisely.
  4. Plan to get a secured credit card.
  5. You must pay your rent on time. Some companies report your rent issues to credit reporting agencies.
  6. You can plan to buy a credit builder loan.
  7. If you wish to develop a good credit report, you must avoid using a debit card. Debit cards will never help you in building your good credit.
  8. Try to increase the credit limit of your credit card. You know how to do it, I expect.

Other Important Information that might help you with your Credit Card Repair :

Improving your credit score is a challenging task. Credit Saint is one of the best credit repair companies that fixes your credit by removing negative information from your report.

What is Credit Saint And It’s Features?

Final Thoughts

If you have a bad credit history or thin credit file, want to apply for a loan, and have a clear idea of repaying it on time, then opt for Experian Boost. However, you better know whether you are in a position to take a debt.

If you are opting for Experian Boost just to improve your credit score, then avoid it. I have suggested ways to improve your credit history, which will ultimately improve your credit score.

FAQ

1. Is it safe to use Experian Boost?

Currently, I can say it is safe. It uses read-only access to your bank accounts. However, I have shared my suggestion here in the discussion above.

2. Does Experian Boost count?

Experian Boost checks the positive information in your bank accounts and reports to count the credit score.

3. How much to pay for Experian Boost?

You have to pay nothing for Experian Boost. It is free.

4. How many points does Experian Boost give?

Almost 85% of thin-file consumers saw an improvement in their credit score. You can expect an average of 19 points increase using Experian Boost.