Experian to Include Utility Bill Payments in New Credit Score Model
Experian has developed a new credit score model to help consumers boost their credit score. The program, known as Experian Boost, uses utility and phone bill payments to contribute to a person’s credit score.
Experian Boost is available to select users at the present time, but will be available for all consumers early next year. It primarily targets people with thin credit files–those with less than five lines of credit. In fact, Experian found that 10% of thin-files became scoreable because of the extra data, and two-thirds of credit scores were improved.
Experian Boost gathers information from a linked checking or savings account. It pinpoints payments for utility and phone companies, and uses positive payment history to improve the person’s credit score. The “boost” from the financial data happens instantly. A new FICO score is generated in real-time. Traditional methods of credit improvement take months to go into effect, which may limit a person’s ability to obtain a loan or credit card.
This is an opt-in service, so consumers can choose whether they want to provide their financial data. Experian says that “Only positive payment histories will be aggregated through the platform and consumers can remove the new data at any time.” Users can choose to “boost” their credit score as many times as they want.
Interested users can sign up for Experian Boost now, and will have access to the service when it becomes available.