How to Improve Your Credit Score Using Your Utility Bills

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4 minutes read

Category: Credit Cards
Posted on: 07/13/2021
A hand holding a cell phone displaying a good credit score in front of a laptop displaying other charts and graphs

Have you seen those commercials on TV that say you can boost your credit score using your payment history from your utility and mobile phone bills? Maybe you don't believe it's possible, or perhaps you want to learn more before you dive in.

Experian Boost is a free program offered by the credit reporting bureau Experian. Since 2019, it has given consumers the ability to possibly "boost" their score by adding utility and mobile phone payment history to their credit reports.

We will break down just how this program from Experian works and why you could see your credit score go up.

What is Experian Boost?

Experian Boost is an opt-in program for anyone. It will allow you to add your payment history from your utilities and mobile phone service to your credit score. This is a big change for the credit reporting industry because, for the first time, you can add information to your report.

Historically, the information is provided to credit bureaus by creditors you use. All the information on your credit cards and loans will be given to the credit bureaus, including the payment history, debt amount, and length of credit. Reports have been compiled this way for about 30 years, so this change is huge for the way things are done.

How Does Experian Boost Work?

Utility bills never used to affect your credit report positively. The only effect they had on it in the past was when you didn't pay them on time and were sent to collections. Now that has all changed.

With this service, you simply visit the Experian Boost website and link the bank account you use to pay your utilities. After a scan by Experian Boost, you will immediately see if paying your utility and mobile phone bills on time will improve your score. You will be able to choose and verify the positive payment history for these bills that you want to add to your overall credit file and, in turn, your score.

Experian Boost will then include those on-time payments and possibly give you credit for them on your report. The results are instant, showing you if your credit score will increase and by how much. 

According to the Experian Boost webpage, average users boosted their FICO Score 8 based on the Experian data by 13 points. With most lenders needing to see your credit score before deciding whether to grant you a loan, this program could help people get that extra push they might need.

Pros and Cons Of Experian Boost

Sounds simple right? Well, in part, yes, but there are some pros and cons to this program you might want to look at before rushing to their website.

As a pro, the program is free, and you get to choose if you want to participate. You don't need to include this information if you don't want to. If you do participate now but change your mind later, you can remove that data at any time without any repercussions.

But by participating, you do have to give Experian Boost access to your bank account. This means providing your login information. While there is no indication that Experian Boost doesn't have tight security, we live in such an age where data breaches and hacking are prevalent. It is ok to take a moment to consider if you want to actually give them that information.

While there is the chance your credit score could be improved by adding your bill payment history and going through the scan, there isn't a guarantee it will actually increase. Some people may see no increase at all. So even though there's that possibility for an increase, it isn't a guarantee.

If you do see an increase, Experian Boost works with both FICO and VantageScore scoring models, but that positive data will only be seen on the report from Experian. Other credit reporting bureau, like Equifax or Transunion, will not report those increases. So if a lender uses either of those bureaus instead of Experian, the boost is not going to help you.

The Bottom Line

Experian Boost has the potential to help raise your credit score, but there is no guarantee, and it is by no means a magic wand sent to fix everything. It is still important to practice good financial habits to maintain your credit score, like making payments on time and having low credit card balances.

Adding your utility and mobile phone bills to your credit score presents a new avenue for consumers looking to raise their scores. If you feel it is worth it, give the program a try, and you might just see an increase.

Finance Guru

Finance Guru