Does Experian Boost Help Mortgage Score?
In today’s competitive real estate market, potential homeowners are always looking for ways to improve their credit scores to secure better mortgage rates. One popular method gaining attention is the use of Experian Boost, a credit scoring service offered by Experian, one of the three major credit bureaus in the United States. But does Experian Boost actually help improve mortgage scores? Let’s delve into this topic to find out.
Experian Boost is a free service that allows users to add their utility and cell phone payments to their Experian credit report. By doing so, these payments can positively impact their credit score, potentially leading to better mortgage rates. The service is designed to help individuals who may not have a strong credit history or enough traditional credit accounts to build a robust credit score.
How Does Experian Boost Work?
Experian Boost works by leveraging the data that lenders already have on file, such as utility and cell phone payments. When a user signs up for the service, they can link their bank accounts to Experian, allowing the credit bureau to access their payment history. Once this information is added to the credit report, it can contribute to a higher credit score.
The key benefit of Experian Boost is that it allows individuals to showcase their payment history for accounts that are not typically reported to the credit bureaus. For example, rent payments, which are often reported by some credit bureaus, are not included in the calculation of the FICO score. However, by adding utility and cell phone payments, Experian Boost can help borrowers build a more comprehensive credit profile.
Does Experian Boost Improve Mortgage Scores?
The answer to whether Experian Boost improves mortgage scores is not a straightforward yes or no. While the service can help some individuals build their credit scores, the extent of the improvement varies from person to person. Here are some factors to consider:
1. Payment History: If a borrower has a history of consistently paying their utility and cell phone bills on time, Experian Boost can help reflect this positive payment behavior on their credit report, potentially improving their mortgage score.
2. Credit Mix: Including utility and cell phone payments can contribute to a more diverse credit mix, which may have a positive impact on the borrower’s credit score.
3. Credit Utilization: By adding these accounts, borrowers may see an increase in their overall credit utilization ratio, which can have a negative effect on their credit score. However, if the increase is not significant, it may not be a major concern.
4. Credit Report Timing: The timing of when a borrower signs up for Experian Boost and when their credit report is pulled by a lender can affect the impact on their mortgage score.
Conclusion
In conclusion, Experian Boost can potentially help improve mortgage scores by showcasing positive payment behavior and contributing to a more comprehensive credit profile. However, the extent of the improvement depends on individual circumstances and other factors. Borrowers should consider using Experian Boost as part of a broader strategy to improve their credit scores and secure the best possible mortgage rates. As always, it’s important to maintain good financial habits and regularly review your credit report to ensure accuracy and identify areas for improvement.
