If you have ever checked your credit score, then you probably already know about Experian. But have you heard about Experian Boost? Let’s take a look at what it is and how it can help to 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 to specific service providers and accounts.
If you make these regular payments and spend less than you earn, you could be rewarded with an instant boost to your credit score.
How does it work?
You need to sign up for the service, which is free to use.
As part of the process, you give permission for Experian to access the last 12 months of your bank account data. This is done in accordance with ‘Open Banking’ rules.
Experian Boost uses this data to obtain 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 this to boost your credit score.
What types of payments will be counted?
The service counts three types of payment:
Council Tax payments
Digital entertainment subscriptions – including payments for services such as Netflix, Spotify and/or Amazon Prime
Payments into savings accounts – including ISAs
The service also monitors the total amount paid into and withdrawn from your account.
Experian Boost does not monitor other transactions, such as credit cards. However, transactions such as credit card payments are already accounted for when you check your normal credit score. So this service should be treated as an additional extra.
Who will benefit from this service?
Anyone that wants to improve their credit score or anyone with a non-existent credit history.
If you already have a good credit score then it’s unlikely that you’ll benefit.
What are the pros and cons of using this service?
Using Experian Boost will not damage your credit score. It ignores any information that could negatively affect your score and won’t share this information with other financial companies.
However, the service is still quite new, and some financial companies have not yet confirmed that they will take this information into account when making an assessment.
You will only fully benefit if your household bills are paid out of your account. So, if you are living in shared accommodation where someone else pays all the bills, you won’t get as much out of the service.
You need to be comfortable with Experian accessing your bank account. While this could put some people off, access will be for up to 90 days. After this time, you can withdraw permission. You can also choose to stop the service at any time.
How quickly will I see the results?
Experian claims that the application process takes about five minutes and you should see an instant change to your credit score.
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 score takes time and patience.
At this point in time, it is difficult to assess just how quickly Experian Boost will truly influence your credit score.
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 until more financial institutions start to recognise these scores as part of their assessment of your credit history before trying it out.
Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.