Credit agency Experian has introduced the ‘Experian Boost’, which promises to increase your credit rating, just by paying usual bills such as council tax, streaming TV services and even putting money into savings. Take a look at this review to see if it’s worth U.K. customers signing up for.
Many years ago (or so my dad tells me), whenever you wanted to borrow money, you would go into a bank and talk to the manager. He (and it usually was a he 30+ years ago) would then decide whether to lend you the money or not.
But a lot has changed over the years and much of the process has become automated. Instead of relying on humans, the lending industry now looks towards credit agencies for indicators of how risky it is to lend to an individual or business.
If you are deemed a low risk, the chances are, you will be lent the money at a very good rate. But if you’re considered a higher risk, the interest you have to pay increases accordingly.
That’s why it’s important to keep your finances in the best shape possible. Not only does it increase the likelihood of you being able to borrow, it will also save you money.
What is a credit agency?
A credit agency is a for-profit company that will collect financial information about you, such as your level of debt and how well you keep up with repayments. They will then assign you a numerical score, which is then passed on to potential lenders.
There are 3 main credit agencies within the UK
When considering who to lend to, the lender may consider to check credit scores from 1, 2 or all 3 of the above.
Who is Experian?
Based in Ireland, Experian is an American company that collects and aggregates information from over 1 billion people across 37 countries. Within the U.K. it is part of the government’s Verify ID system and USPS Address Validation.
How does Experian Boost work?
In the past, the fact that you regularly kept up to date with payments to the council and various companies had no impact on your credit score. This is because they weren’t seen as credit agreements, even though you were generally obliged to pay them.
However, Experian Boost promises to change all that. By linking your bank account, if your payments are in good order and you don’t spend more than you earn, your credit rating with Experian will automatically be boosted.
How to sign up to Experian Boost
If you’re not an existing customer, you will need to sign up for an Experian account, which is free to do. As a word of warning, they do ask for details such as your income and your homeowner status, but these are purely optional and don’t need to be answered – although that isn’t completely clear.
You will need to confirm that you are the rightful owner of the information and will be asked a few simple questions, such as which bank accounts you hold.
Once you have an account up and running, there will be an option to join Experian Boost. To do so, you will need to link Experian to your current account through Open Banking. If you’ve never used it before, Open Banking is a recognised method of linking financial accounts, used by many major U.K. banks and budgeting apps. Experian will only have read-only access to your bank account and will not be able to make any transactions.
However, if you have a perfect credit score with Experian and want to try out the Boost option, you can’t. It will only allow you if your credit status can be improved.
What type of payments are taken into consideration?
You can increase your credit score if you pay out for
- council tax
- digital entertainment subscriptions (such as Netflix, Amazon Prime and Spotify)
- regular savings accounts or investments
What impact does it have to my credit rating?
Experian marks credit scores out of 999. The higher the number, the better your rating is. With Experian Boost, as long as you have regular payments leaving your account, your credit rating will increase by 66 points.
According to Experian, consumers in the US have added 29 million points to their credit scores using Experian Boost, which was introduced back in 2019.
Can my credit rating go down?
No. Experian promises that the worst that can happen is that your credit rating will not move.
How much does Experian Boost cost?
Nothing. The service is completely free.
Why is it on offer?
I would love to say that Experian Boost is there to help customers and give them a helping hand when it comes to borrowing. However, credit agencies like to collect data and sell it on. My feeling is, having access to people’s banking behaviour will give them far more information that they can collate together and sell.
But it’s important to note that this information shouldn’t contain any personally identifiable data.
So, does Experian Boost work?
Well, sort of. Yes, as long as everything is in order, your credit rating with Experian will instantly increase.
But remember, credit agencies don’t lend you money. Even having a perfect score with one or more does not guarantee you a loan or the best rate. Lenders have their own criteria when they choose suitable customers.
If millions of people suddenly receive a boost to their credit rating, will lending institutions drop their loan rates? This has yet to be seen, but I’m guessing not.
And finally, not every company uses Experian as their chosen credit agency. Figures suggest the percentage of companies that use the following credit agencies.
- Experian 76%
- Equifax 54%
- TransUnion 30%.
So, there is a chance that your chosen lender might not even use Experian.
But I see little harm in trying to Experian Boost and will be interested to know people’s experiences and whether it improves their loan chances.
How long does Experian Boost take to update?
If you have a free account, your score is updated every 30 days.
Is Experian Boost safe?
Experian Boost uses bank-grade 256-bit SSL encryption to secure your data.
Why does Experian Boost need bank details?
This allows Experian to see if you are making regular payments and not spending more than you earn.