There are two different “credit score boost” options that provide opt-in scores – UltraFICO and Experian Boost.
UltraFICO gives you the ability to include and reflect your bank deposit account information on your credit score. This opt-in credit model uses the financial information from your checking, savings or money market accounts as an addition to data already on your credit report. The information being calculated includes how much money you have in savings, length of time the accounts have been open, how active the accounts are and whether there has been a negative balance.
FICO reports this addition will give consumers the ability to “boost” their scores as a reward for managing their bank deposit accounts responsibly.
Criteria required for UltraFICO to make a positive impact:
- No record of negative account balances
- Maintained an average of at least $400 in a savings account
- Applying for credit through a lender that uses this credit score model (credit cards, some car dealerships and some landlords)
In our professional opinion the few points a consumer gains on one bureau isn’t worth giving away ALL your banking information and these points aren’t reflected on the credit reports that the mortgage industry pulls. The impact will only be reflected on some credit reports (usually credit cards, some car dealership reports and VantageScores (on-line scores)). These additional points are only reflected on the Experian report which is only one of the three credit bureaus responsible for consumer reporting in the United States.
Experian Boost is an option to include utility payment history to prove your credit worthiness by granting Experian the right to look through personal online banking for utility and phone payment data, such as water, gas, electricity, cable and cell phone plans. If the system detects a positive payment history, going back at least 90-days, the information is added to your credit report, upon confirmation. This addition would make it possible for certain FICO and VantageScore credit scores to utilize this information when creating your actual credit score and you could see a small increase in your scores.
If payments are missed on a utility bill, or if Experian Boost is unable to obtain your payment history for 90-days or more, the account is removed from your report and won’t be calculated into your credit score. The reason Experian Boost only considers positive payment history is because negative items such as delinquent bills will most likely end up on your credit report, either through a collection or directly from the utility provider.
This option could be an opportunity to extend your positive credit history as Experian continues to monitor your connected bank account each month. If you make the decision to longer utilize Experian Boost, you can disconnect your accounts. Disconnecting however, will remove the entire payment history of those bills from your report. Keep in mind the points you gained would also no longer be reflected in your score and your score could drop as a result, having an adverse effect to accomplishing your goals.
Ultimately, you must ask yourself is the juice worth the squeeze. Is it worth giving even more personal data out for a few points on one bureau’s report? This is a good option for someone with a thin credit profile applying for credit cards or a car loan to help in the first steps of building a credit profile but isn’t a quick fix for someone looking to get a mortgage or home loan.
What to remember: Evaluate the risk versus reward in your financial situation.