In 2020, borrowers refinanced their car loans earlier into their term, the lowest since 2013. Last year was a big year for auto loan refinancing. Nearly all states registered more auto loan refinance applications, and 16% more Americans applied for refinancing in 2020 compared to 2019. Borrowers also chose…
Good news binge-watchers: Experian now lets you add Netflix payments to your credit report.
Since sporting events, concerts, and social activities are being canceled left and right due to COVID-19, you may find yourself planted more often in front of your tablet or TV.
In July, Experian announced that the Experian Boost service can now add Netflix payments to your credit report. So, watching the latest season of “The Umbrella Academy” can do more than help you pass the time — it could improve your credit score.
What Experian Boost Is and How It Works
Experian Boost is a free service that lets you add on-time bill payments to your credit report.
Payment history is the factor that has the most impact on your credit score, so you could see a score increase after using the service. And a higher score means you could qualify for personal loans, car loans, or car refinance loans that have lower interest rates and fees.
Until now, Experian Boost could only add utility payments and cell phone payments to your credit history. The recent addition of Netflix payment history could possibly help millions of people build credit. Just look at the numbers — Netflix added a massive 26 million paid subscribers in the first half of 2020 alone.
So, how does it all work?
After signing up for Experian Boost, it will scan your bank account to pull payments made to eligible service providers. You then choose the information you want to add to your Experian credit report.
The beauty of Experian Boost is that only positive payment history counts; late payments found will not be added to your profile, and that means it will not weigh negatively against your score.
Experian Boost credit report tools and security features
Besides the account reporting aspect, Experian Boost offers other tools to help you monitor and grow your score. For example, you get a free Experian credit report and FICO Score updated every 30 days. Plus, you get dark web scans that can help identify identity theft.
Because of the Equifax data breach in 2017, you may be apprehensive about signing up for products that aren’t absolutely necessary. Experian transmits your personal information through a secure connection.
The Experian website also has the McAfee SECURE certification, which means it’s regularly scanned for weakness that hackers could exploit, and data passed through the site is encrypted.
Does Experian Boost Really Work?
The results vary. We spoke with two people who used the service — one saw a 42-point score increase, while another didn’t see any movement at all. Both say the signup process was easy. Changes only affect your Experian score since the information is added to your Experian credit file.
Experian states that 62% of users overall see a score increase, and the average Experian FICO® Score 8 increase is 13 points. But, according to the website, that’s not a guarantee: “Some may not see improved scores or approval odds. Not all lenders use credit information impacted by Experian Boost.”
You could ask your creditor ahead of time what credit report and score they pull and whether they will accept the Experian Boost data. If the creditor pulls reports from TransUnion or Equifax, the credit score increase from this service may not help you much.
Ultimately, you shouldn’t expect Experian Boost to take your Experian credit score from poor to excellent. But if you’re maybe a handful of points away from being in the “fair” or “good” range, the service could give you the increase you need to get over the hump.
Who Is Experian Boost Right For?
People building credit from scratch or rebuilding might benefit from Experian Boost the most because it could give you a head start. It can take three to six months to calculate a credit score after you open your first account, according to Experian. Meanwhile, Experian Boost can instantly add utility, telephone, and Netflix payments to your Experian credit file.
With that said, this probably won’t be a credit building shortcut for teenagers, students, or young adults who have a thin file unless they have some household bills in their name. And, of course, if you’re using someone else’s Netflix account, you won’t be able to claim those payments as your own — bummer.
People with less-than-stellar credit who have been managing their own bills for years might see a bump from having payments counted. Just keep in mind that Experian pulls payments from your bank accounts, so if you use a credit card to pay the bill, those payments won’t be calculated in your “boost.”
How to Sign Up for Experian Boost
If you want to see what Experian Boost can do for your score, here’s how to get started:
- Sign up for an Experian Boost account: Experian will ask for your name and address to get started. Then you’ll set up an email and password for the account.
- Add your bank account to the profile: Experian will review transactions from your bank account to locate utility bills, phone bills, or Netflix payments that could be added to your credit history.
- Choose the payments: Experian will tell you the payments found that are available to add. You select the ones you want to include in your report.
- Watch your score “boost”: The Experian score increase can happen instantly.
But think of Experian Boost as the icing on the cake — it’s a sweet bonus that could compliment the other parts of your credit building strategy.
Other Ways to Improve Your Credit Score
Doing the steps below could help your score grow by many more points than Experian Boost alone.
Pull your credit report and scores
Usually, you’re able to get one free credit report from each credit bureau annually at AnnualCreditReport.com. Until April 2021, the three credit bureaus — Equifax, Experian, and TransUnion — are offering free weekly reports because of the pandemic.
A free FICO credit score usually does not come with your free credit report. Your bank or credit union may offer free FICO Scores or can buy your FICO Score from myFICO. Another option is signing up for sites like Credit Karma or CreditCards.com to get a free VantageScore.
Look for errors and dispute them
Scan your credit reports for negative records that are incorrect. Look for accounts that don’t belong to you and late payment errors that could be negatively impacting your score.
Under the Fair Credit Reporting Act (FCRA), the credit bureaus have to open an investigation when you file a dispute unless the claim is considered frivolous. So, print out your credit report, circle errors, and write a dispute letter to each of the credit bureaus reporting the information.
Mail the dispute letter in a certified mail package that has tracking to confirm it gets into the right hands.
Make on-time payments from here on out
Your payment history is the most influential factor that affects your credit score. Don’t worry — late payments won’t follow you around forever. Late payments generally fall off your report after seven years. As time goes by, the impact of your positive recent history starts to count more than the past history. So, make it a priority to stay on top of payments moving forward.
Crush your credit card balances
Your credit utilization — a ratio that compares your credit limits to your credit balances — is another component that highly influences your credit score. Experts recommend not using more than 30% of your available credit.
It’s important to keep your credit card balances at a manageable level. Maintaining high account balances on your credit report shows lenders that you may be a credit risk and it can drop your score.
Building Credit Takes Time
It can take years of faithful on-time payment to build a solid credit history, so don’t worry if your credit could use a bit of work. Pay on time, dispute inaccurate records, try to maintain low debt balances, and think about signing up for credit monitoring to track your progress.
If you decide to try Experian Boost know that it isn’t a miracle worker; it could help increase your Experian credit score by several points in the best-case scenario, or none at all in the worst.