Credit scores set to be boosted by Experian
The new service will allow regular payments such as council tax bills, streaming subscriptions and savings to be added to credit reports.
Experian claims that more than half (51%) of people using Experian Boost will receive an instant increase to their Experian Credit Score, meaning about 17 million consumers could benefit from the service.
It says that among this group, more than one in 10 (12%) people could move up an entire Experian score band.
Experian Boost allows people to add information to their credit report using Open Banking. This includes general information, such as total incomings and outgoings, as well as a range of regular payments not traditionally factored into credit scores.
These include council tax, savings and investments, and digital entertainment services such as Netflix, Spotify and Amazon Prime.
These payments have not been factored into credit scores before. By including it, Experian claims that the Experian credit score recognises and rewards people for making regular payments to a broader range of organisations.
The maximum amount people can boost their score by is 66 points. Experian says no one will see their Experian credit score go down as a result of signing up to Experian Boost.
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.”
Andrew Hagger, personal finance expert at MoneyComms, said: “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.”