Is Experian Boost Worth It?

Is Experian Boost Worth It?

December 22, 2020         Written By Tracy Farnsworth

The Experian Boost™ program started in December 2018. Since its debut, it has helped millions of consumers increase their credit score. Some see substantial increases, but others only see their scores go up by a few points. It’s hard to tell how much it will help you, which often has people wondering if it’s worth signing up.

Experian Boost™ is a free product from the well-known credit bureau. It’s meant to help consumers who don’t have a strong credit report. It’s most useful for people who don’t own credit cards or have just graduated and haven’t had time to build a credit history. According to Experian, the Boost program has helped 1 out of 10 people increase to a higher FICO credit level. Almost 8 out of 10 people with bad credit saw their score increase. It’s helped people with no credit history get a score.

How Does Experian Boost Work?

It’s important to understand what Experian Boost™ does. Your FICO score is used by lenders and credit card companies to decide if you’re a good risk or not. When you apply for a loan, a mortgage, or a new credit card, the financial institution pulls up your credit history to see how well you manage your debt. Most use FICO, which gives you a rating based on these criteria:

  • Payment History (35% of your score) – How many late payments or missed payments do you have? Make your payments on time to avoid losing any points in this part of the scoring process.
  • Credit Utilization (30% of your score) – What are your spending habits? Ideally, you do not want to use more than 30% of your available credit. So if you have a credit card with a $2,000 credit limit, you want to keep the balance under $600.
  • Credit History (15% of your score) – How long have you had your credit card and loan accounts? If you have had the accounts a long time, that should benefit your credit score. If you’re the type to apply for a credit card and cancel it a few months later when an introductory APR may have ended, it can count against you. A credit history of several years is better.
  • Credit Mix (10% of your score) – What types of credit do you have? It’s best to have a mix of products like credit cards, a car loan, a mortgage, and student loans.
  • New Credit (10% of your score) – Each time you apply for a new credit card or loan, a hard pull of your credit report is ordered. One or two may not impact your credit, but more than that might. According to FICO, each hard pull can lower your score by as much as five points. If you apply for four new credit cards after being denied the first time, you could see your score drop by 20 points.

FICO looks at payments you make on loans (car, mortgage, home equity, personal, and student) and credit cards. It never looks at the other payments you make each month to streaming services (Disney+, Hulu, Netflix, etc.), telecom (house phone or cellular phone services), or utility (electricity and water) bills. Experian Boost changes that.

The Experian Boost™ program scans the payments you’ve made in the past 24 months. It only takes payments you approve that were taken from your checking account. It takes your positive payment history for things like your electricity, your Netflix subscription, and mobile phone service and adds it to your FICO score. On-time payments help increase the Payment History part of your score. You’re not in danger of it lowering your score if you miss a payment. Experian Boost only records on-time payments.

The other thing to realize is that Experian Boost only raises your FICO score through their system. The score increase will not carry over to the other credit bureaus (Equifax and TransUnion). If your lender or credit card company pulls the score through TransUnion, your former score is what the company or lender sees.

How Much Has It Helped Raise Scores?

How much Experian Boost™ may help your score depends on your history or lack thereof. You must have been paying the bill using your checking account for a minimum of three months. Longer is better.

When a consumer from South Lake Tahoe, California, added phone and utility bills, the FICO score only increased by one point. It wasn’t much of a difference.

A consumer from Arizona signed up and saw the FICO score jump by seven points, which moved him from having Fair Credit to Good Credit. It wasn’t a large jump, but moving to a new credit level improves the chances of getting lower interest rates and saving money.

Others have seen substantial increases. A consumer from Oakland, California, went from having Poor Credit to Fair Credit after Boost increased the FICO score by 50 points.

How about my own experience? I have a 30-year history with credit cards, car loans, and mortgage companies. I didn’t expect it to go up much. Instead, a family friend with no credit history other than college loans agreed to try it. His score increased by 27 points by looking at payments for his cellphone.

Is It Safe?

You may not feel comfortable sharing your checking account number with Experian. While they can only read your account information, sharing this type of information always comes with a risk. Breaches can hit any company at any time and put your information at risk.

There is a way around this. You could set up a free checking account with Experian Boost. When you need to pay a bill, transfer enough money to cover that bill. Experian sees your positive payment history but isn’t connected to the checking account you use most often.

Is It Worth It?

Is the Experian Boost™ program worth your time? What’s important to know is that Experian Boost is free. Link your checking account to Experian and it gets to work increasing your score. It only pulls the payments made on time, and it ignores payments that were made late or skipped. There’s no way for Boost to cause your score to drop. The only way your score will go down is if you cancel the program, and even then, you’re only returning to the score you had before the program took effect.

If you have a car loan, mortgage, and credit cards, Experian Boost™ isn’t likely to help much. If you use your PayPal or other third-party processors to pay your streaming, telecom, or utility bills, it cannot track those payments. If you use a credit card to pay your bills, it’s also not going to help. You have to have a checking account and use that account to pay your bills.

It’s designed to help people with no credit history or bad credit. If you don’t fall into those categories, it’s unlikely to raise your score by much. Still, it’s free. You can try it out and see if it makes a difference and cancel if it doesn’t.

As it’s free, it is very well worth a shot. It may not help a lot, but even a jump of a few points is better than nothing. Cancel with ease if you don’t feel it raised your score enough. Experian Boost is risk-free and well worth your time simply to see if it can help.

The information contained within this article was accurate as of December 22, 2020. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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tracy

About Tracy Farnsworth

Tracy Farnsworth went straight from a business track in high school to a full-time job in mortgage banking in Burlington, Vermont. After having children, she built a freelance career in content writing and took online classes as time allowed. She completed Social Media Marketing and Digital Marketing certificate programs with Ireland's online Shaw Academy and completed several courses in SEO and analytics. In her free time, she's the “mom” to a very clingy rat terrier, and the pair walk at least a mile every day. She's also a novice baker who is trying to master the art of sourdough bread.