TheCreditGuyTV Podcast

Experian Boost® Score

Today we’re going to take an in-depth look at Experian Boost score,
One of the problems that FICO® has had in the past with other versions of a new FICO® score was trying to score people with a thin repository file. FICO® was trying to create a reliable scoring model that used fewer data inputs.
The Experian Boost® score is the first-time additional data has been used from a financial intuition to supplement the repository file. They’re connecting bank payment history into this repository file, looking for consistent payments to creditors. Experian Boost® will be included in FICO 8 and FICO 9 credit scores

FICO® has tried this in the past, they called it XP, they called it new FICO®, many times over the years they’ve tried to create a FICO® score using less information and it never worked. What’s different about this is that they are getting more information from financial institutions.

What Experian Boost® is looking for is a series of payments to a creditor like a utility company or a cell phone provider, something that the consumer has set up to automatically pay or to pay through a bank account. Experian Boost® is linking consumer accounts much like an online mortgage application or TurboTax, they’re interfacing with the consumer’s financial institutions. Creating a credit history based on past payments that the consumers have made and adding it to the Experian repository file.

I had made some payments out of my Bank of America account and when Experian Boost® reviewed that information. it gave me a few more points now this is not designed for somebody with a long credit history is really designed for somebody with a thin credit history somebody who does not have a lot of credit.

The drawbacks from a lending perspective is that Experian Boost® will not look at derogatory information. It looks at payment history in consumer’s bank accounts. In my specific situation, it found a few payments out of one of my accounts and added it to my repository file.

My DTE account added to my Experian® Boost score; 19 payments, a utility, average payment amount, then it calculates my score new score. In this situation, my score happened to go up, a few points from the boost.
Experian Boost® will improve both FICO 8 and FICO 9 scores if your financial institution uses one of those scoring models then it could help you get a better rate on some financing.

If a consumer is planning to apply for a mortgage Fannie and Freddie do not accept any other credit score other than FICO5 score. The Experian Boost® score will not impact a consumer’s mortgage credit score. Right now, Fannie and Freddie still require FICO5

I’ll be at the Building Community Conference in Lansing speaking about all the latest developments in credit scoring.