Experian is launching the UK’s first service to give consumers the ability to instantly improve their credit score, using information such as regular video and music streaming payments and council tax payments.
The company says early analysis suggests over half of people (51%) using the new service will receive an instant increase to their Experian Credit Score, meaning around 17 million consumers are set to benefit. Among this group, more than one in 10 (12%) will move up an entire score band.
The new service will enable personal borrowers to opt into a system that will allow it to take into account factors not used at present when assessing creditworthiness. Experian says people signing up could lift their credit scores by up to 66 points.
Experian says that open banking transactional data has never been factored into credit scores before. By including it, Experian Boost ensures that the Experian Credit Score recognises and rewards people for making regular payments to a broader range of organisations, helping credit reporting to evolve and improving lenders’ credit assessments.
The service follows a hugely successful launch in the United States where consumers are seeing the benefits of easily improving their credit scores.
Clive Lawson, Managing Director for Consumer Services at Experian, said “Experian wants people to get credit where credit is due. We are always pushing the boundaries of innovation for two key reasons – to give consumers more control over their financial lives, and to ensure lenders have the information they need to make informed, responsible decisions. There’s never been a more important time for people to engage with their credit scores and Experian Boost will help them to do this. We are incredibly excited to provide this ground-breaking, free service now to help build better financial futures for consumers in the UK.”
Personal finance expert from MoneyComms, Andrew Hagger, said “I’m sure many customers will welcome the opportunity to boost their credit score in the current difficult financial climate.”
“The Experian Boost service is an excellent example of how open banking can deliver tangible rewards for consumers. The potential financial benefits of this new initiative could see some customers having access to more favourable interest rate terms and improved credit limits.”
“It’s refreshing to see this new partnership between Experian and key UK lenders and I hope it sets a precedent for the wider credit score industry.’
Responding to the launch Sarah Pennells, Head of Financial Capability at Royal London said “With more people buying services on subscription, Experian’s service that takes account of these regular payments may seem like a logical next step. However, it’s important for people to realise that there’s no ‘universal’ credit score and the company you’re applying to credit for may give you a different credit score entirely. Secondly, this is an opt-in service, which involves sharing your bank account details with a credit reference agency via Open Banking which some people may not feel comfortable with.”
“However, the bigger issue is that credit reports and credit scores remain a complete mystery to many consumers who either don’t check their credit report  or don’t understand the information when they do. The Financial Conduct Authority started looking into credit information last year, including how much  consumers engage with it and understand how it’s used. This should provide some useful insights into what else needs to be done to help people understand how to improve their credit rating.”