Experian is launching the UK’s first service to give consumers the ability to instantly improve their credit score, using information such as regular video and music streaming payments and council tax payments.
Early analysis suggests over half of people (51%) using Experian Boost will receive an instant increase to their Experian Credit Score, meaning around 17 million consumers are set to benefit (1). Among this group, more than one in 10 (12%) will move up an entire Experian score band.
The new, free service will help people to take control of their Experian Credit Score (2) by voluntarily adding new relevant and real-time information via Open Banking (3). This includes general information, such as total incomings and outgoings, as well as a range of popular, regular payments not traditionally factored into credit scores. At launch, Experian Boost will take into account regular payments to the following:
- Council tax
- Savings & investments
- Digital entertainment services such as Netflix, Spotify and Amazon Prime
The maximum amount people can boost their score by is 66 points. No one will see their Experian Credit Score go down as a result of signing up to Experian Boost.
Open Banking transactional data has never been factored into credit scores before. By including it, Experian Boost ensures that the Experian Credit Score recognises and rewards people for making regular payments to a broader range of organisations, helping credit reporting to evolve and improving lenders’ credit assessments.
The service follows a hugely successful launch in the United States where consumers are seeing the benefits of easily improving their credit scores.
Clive Lawson, Managing Director for Consumer Services at Experian, said:
“Experian wants people to get credit where credit is due. We are always pushing the boundaries of innovation for two key reasons – to give consumers more control over their financial lives, and to ensure lenders have the information they need to make informed, responsible decisions. There’s never been a more important time for people to engage with their credit scores and Experian Boost will help them to do this. We are incredibly excited to provide this ground-breaking, free service now to help build better financial futures for consumers in the UK.”
Experian Boost can become an important tool to help safeguard access to affordable credit, especially given the current economic environment. Finding new ways to further improve the accuracy of credit scoring is incredibly important, to help ensure consumers have access to the right, affordable financial products for them. Improving accuracy also protects lender business models.
“Access to credit is critical to keeping the economy going. By giving consumers more ways to improve their credit score, they are empowered to present the best possible version of themselves when applying for credit. Meanwhile, by providing broader, deeper insight into financial and credit histories, Experian Boost helps ensure lenders can provide affordable credit to more people. Crucially, this means Experian Boost further improves the accuracy of credit scoring, supporting fairer lending and including more people in the mainstream financial system.”
Personal finance expert from MoneyComms, Andrew Hagger, added:
“I’m sure many customers will welcome the opportunity to boost their credit score in the current difficult financial climate.
“The Experian Boost service is an excellent example of how open banking can deliver tangible rewards for consumers. The potential financial benefits of this new initiative could see some customers having access to more favourable interest rate terms and improved credit limits.
“It’s refreshing to see this new partnership between Experian and key UK lenders and I hope it sets a precedent for the wider credit score industry”.
People can access and find out more information about Experian Boost at www.experian.co.uk/consumer/experian-boost.html
1. This estimate is based on an analysis of the proportion of credit active individuals (defined as people with a credit balance and/or have made a recent credit application) who are likely to see a boost to their score from the initial testing, as of 22 October.
2. The Experian Credit Score is based on the information in their Experian Credit Report, such as how many credit accounts they have and how much credit they use as a percentage of their credit availability. It runs from 0-999 and can give someone a good idea of how lenders are likely to view them. The higher their score, the better the chance the individual has of securing the credit they’re after along with lower interest rates because they are predicted as more likely to pay back their borrowing. The table below is a score band guide to show what scores generally secure the best offers.
Experian Credit Score Bands
Very Poor 0 – 560
Poor 561 – 720
Fair 721 – 880
Good 881 – 960
Excellent 961 – 999
An Experian Credit Report already includes a wide variety of accounts such as loans, credit cards, mortgages, mobile phone contracts, bank accounts and even some regular household bills such as energy, water and broadband. Reports also include a selection of relevant public records such as the electoral register as well as court judgments (‘CCJs’ in England and Wales) and insolvencies. In most cases, a credit report captures this information over the past six years.
Alongside the credit report, the lender might also assess the information on your application form (about your occupation and income, for example) along with any information it already knows about you if you’ve been a customer before.
3. Open Banking is an initiative that allows consumers to share their bank transactions with FCA authorised third parties via a safe and secure connection. Data cannot be shared without the consumer’s explicit consent. The aim of Open Banking is to drive innovation in the quality of products and services that people can access.
Open Banking uses APIs – or Application Programme Interfaces – which are technology that allow banks and other companies to conveniently and securely share data between their organisations.