Credit Score Boost? Cellphone, Utility Payments Soon to Get Factored In

January 9th, 2019

Steve Hollander – Hollander Real Estate
Realtor® Magazine

Millions of consumers may soon see a boost to their credit scores, which could help when applying for a mortgage. One of the largest credit-reporting firms in the U.S., Experian PLC, announced it will give consumers the option to have their cellphone and utility payments factored into their credit scores early next year. About 46 million consumers who have limited credit data could instantly see an increase to their credit scores from the new data being added in, according to Experian.

This marks the first time consumers will be able to have such data factored into their credit reports and scoring. It follows on the heels of several other changes. Fair Isaac Corp., the creator of the FICO credit score, will soon be launching a new credit score with Experian that will take into account a consumer’s history managing their checking and savings accounts. That move also could give consumers a boost to credit scores for those who at least keep several hundred dollars in their accounts and don’t overdraw.

Also, all three major credit reporting firms—Experian, Equifax, and TransUnion—have all recently removed negative information, like tax liens and judgments, from consumers’ credit reports. This move has also helped lift many consumers’ credit scores.

Experian’s latest change, named Experian Boost, will allow consumers to opt in and link the bank accounts they use to pay their phone and utility providers to Experian. The company can then track their monthly payments to utilities, cellphone, and landline phone and cable TV accounts. It will not track missed payments, according to The Wall Street Journal. Experian will delete the account from its credit report if consumers stop paying their bills for three consecutive months from the accounts linked to Experian Boost. Consumers’ scores will then be recalculated without the additional account. In such cases, that could then cause a drop to the credit score.

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