What Is Credit Boost and How Does It Affect Your Score?

Understanding Credit Boost

Credit boost services represent a modern approach to credit building, aiming to help individuals improve their financial standing. These services work by incorporating payment data that traditionally does not appear on standard credit reports, providing a more comprehensive view of an individual’s financial responsibility beyond conventional credit accounts.

Many people, especially those new to credit or with limited credit histories, find it challenging to establish a strong credit profile. Credit boost initiatives seek to bridge this gap by recognizing consistent, on-time payments for everyday bills. This offers an alternative pathway for consumers to demonstrate their creditworthiness, particularly helpful for those who meticulously manage their finances but lack traditional credit lines.

How Credit Boost Utilizes Your Data

Credit boost services operate by collecting and reporting specific types of non-traditional payment data. Typically, users grant permission for the service to access their bank accounts, allowing the system to identify recurring, on-time payments for various household bills. This process often involves securely connecting bank accounts to the service’s platform.

The data points commonly utilized include:
Utility payments such as electricity, gas, and water bills
Telecommunication bills for mobile phones and internet services
Streaming service subscriptions
Residential rent payments, provided they are made online through eligible platforms

Once these on-time payments are identified, the credit boost service compiles this information. This compiled data is then reported to one or more of the major credit bureaus, such as Experian, TransUnion, or Equifax. This reporting process adds new “tradelines” to an individual’s credit file, reflecting their positive payment behavior. It is important to note that these services typically only report positive payment histories, meaning late or missed payments for these specific accounts are generally not included.

Beyond household bills, some advanced credit boost concepts also consider banking transaction data. This can include information related to checking and savings account balances, income deposits, and consistent spending patterns. This broader financial behavior data can provide lenders with a more detailed understanding of an applicant’s financial health, especially for those with limited traditional credit.

Potential Effects on Your Credit Score

Using a credit boost service can lead to an improvement in an individual’s credit score, particularly for those with limited credit history, also known as a “thin credit file.” For instance, users of certain services have reported an average increase of approximately 13 points in their FICO Score 8. This can be beneficial for consumers looking to establish credit or move into a higher credit score bracket.

The impact of these services can vary significantly based on an individual’s existing credit profile. People with minimal or poor credit histories often experience the most noticeable score improvements. However, individuals who already possess a strong credit score may see a smaller increase, or no change at all.

It is important to understand that not all credit scoring models or lenders fully incorporate data from credit boost services. While some services can affect widely used scores like FICO Score 8, they might not influence other FICO versions, such as those often used by mortgage lenders. Additionally, a credit boost might only update the credit report with a single credit bureau, leaving reports with the other two bureaus unaffected. This means that while a score may improve with one bureau, lenders checking another bureau’s report may not see the change.