Experian’s free Boost service, which launched last week, lets people share details of some everyday transactions. This then allows Experian to create a “boosted” credit score, which takes this behaviour into account – though lenders and other credit providers will still be able to see customers’ pre-boosted scores.
Experian says sharing this data can strengthen consumers’ payment histories, and more than 50% of consumers who use Boost will see their credit scores increase. And crucially, it says using the Boost service will never damage your credit score.
How does it work?
Experian will also use your last 12 months of ‘Open Banking’ data to find information about certain other payments.
Open Banking is a series of reforms to how banks deal with your financial information. In plain English, it means that banks and building societies must allow regulated businesses access to your financial data, such as your spending habits and regular payments, as long as you give your permission.
If Experian finds generally positive information in your Open Banking data – for example, you’re regularly paying into savings accounts or paying your council tax or digital subscriptions on time – it will use this to calculate a boost to your credit score, which could mean an increase of up to 66 points. The maximum score someone can be given with Experian is 999.
Boost currently takes three types of transaction into account:
• Council tax payments
• Digital subscriptions (eg, Netflix, Spotify, or Amazon Prime)
• Payments into investments and savings (eg, ISAs and other savings accounts)
The Pros and Cons of Boosting your Credit Score
The main pros of the Boost scheme are that it’s free to use, and Experian says it will never damage your credit score as any information that wouldn’t boost your score will be disregarded and won’t be shared with firms searching your credit report.
This means in theory you have nothing to lose by signing up to the scheme, so it may be worth a shot for those who are looking to boost their credit scores.
On the other hand…
• It’s not yet clear, how much difference a “boosted” score will make to lender decisions. While Experian says its Boost service could boost customers’ Experian credit scores, the early signs are that lenders and other credit providers aren’t immediately using the new Boost data. Instead opting to use your pre-boosted credit score.
You’ll need to be happy to share your data with Experian. When you connect your bank account to Boost, Experian will be given information such as your account details (including your account name, number, sort code, and balance), details of your transactions going back up to two years, and account features.
• Experian will have access to your data through Open Banking for 90 days, at which point it will ask you to renew your permission if you want to continue. If you don’t give permission again, you’ll lose any increase to your credit score you’d gained through Boost.
• It’ll only help your Experian credit score and won’t make a difference if your credit score’s already perfect.
Sign up to Experian Boost here
Credit Score Boost Alternatives
If you rent your home and want your rent payments to count towards your credit score, you can also opt into the free Rental Exchange Initiative or self-report using services such as CreditLadder or Canopy – though be aware that, again, unlike Boost, signing up for these services could negatively affect your credit file if you don’t always pay your rent on time.