Experian offering potentially higher credit scores in exchange for access to people’s bank accounts.
Your Credit Minute Show Notes:
- 00:01 What’s up everyone. Nik Tsoukales here with Key Credit Repair. I’ve got some quick credit news for you, hot off the press from Housing Wire uh, yesterday morning. Um, we have Experian offering potentially high credit scores in exchange to access to people’s bank accounts, and a lot of people are wondering what this is all about. And a lot of people are wondering about some other news, that kind of coincides with this about having cell phone usage, or how you’re paying your cell phone, uh, affect your credit in a positive way.
- 00:28 So, in the past, what has always happened was if you’ve made your uh, utility payments on time, um, including your cell phone payments, it didn’t report to the credit agencies. But, if you wanted to default, it quickly reported as a collection. It’s probably the number one thing that we work on here at Key Credit Repair. But, you never got the positives from it, only the negatives if things fell apart. Well, Experian today, or yesterday, uh, announced that it’s releasing a new program called Experian Boost. Kind of an interesting little uh, little program. How beneficial it’s going to be, um, kind of up for debate, because it’s only Experian’s program. Obviously, we want to see all three credit agencies, and all three credit scores looking good. Experian, Trinity and then Equifax. But even so, this is a step in the right direction.
- 01:12 So essentially, what’s going to happen is you’re going to be providing Experian, and obviously this is an opt-in, you’re going to be providing Experian with your bank account information. Experian will then use some fancy software to log into your bank account and essentially analyze your transactions and look at things like utility payments, okay? They will then report those on-time payments to your utility companies, as well as your cell phone company, um, to uh, the Experian credit report. That will then get taken into account under their new FICO eight algorithm, and will potentially increase your credit scores.
- 01:45 Now, let’s say you’re not making a cell phone payment, or let’s say you stopped. You get a late. That’s one of the questions we’ve been asked today about this, and the answer to that is right now, probably not. What they’re telling us is if you stopped making a payment, maybe a payment’s not due, um, what’ll happen is if you stop making those payments, 90 days later the Experian Boost program simply will not take that account, uh, will not take that account into account. So, it will no longer report to uh, the Experian credit report, so keep that in mind. So, you shouldn’t be negatively affected. Obviously, if you miss payments for 90 days, it will then go into collections anyway, so you’ll get the negative ramifications of that then.
- 02:26 Um, some quick stuff. This is uh, for utility bills. Um, cell phones. Again, uh, if you stop paying, it will discontinue in 90 days. This is being used for FICO eight. Keep in mind, banks and lenders, for the purpose of mortgage lending, they’re not using FICO eight. They’re using FICO four. They’re using some prehistoric versions of the FICO algorithm. FICO eight is not the score of choice for home lending. And I say this, and I, and I warn everyone, because this is the credit score that our typical client is using to finance a home. Um, most of our clients are trying to buy a home eventually. They’re trying to become uh, homeowners from lenders, so it’s very important.
- 03:06 Um, also something to keep in the back of your mind is the fact that you are linking up your bank account information to Experian. Not to say that al-, already have everything on us, uh, they already have a lot of our data, but you’re also linking up your bank account information. So, they’ll have the ability to see uh, your spending habits, and where your money’s going, so that’s something to think about as well. Do we want to share that aspect of our finances with one of the credit agencies? We all know the credit agencies do resell data, okay? They’re big marketing company as well, so that’s another thing to keep in mind. Uh, guys, this is Nick Tsoukales with Credit News Daily. I’m going to include a link here for the text, or transcript of this blog. Feel free to read through it, and feel free to email us at firstname.lastname@example.org. If you have any questions on how this could adversely affect you, or even benefit you in the future. Thanks and have a great day.