Real Estate News

Can Experian Boost Turn You into a Homebuyer?

Written By: Jaymi Naciri
Tuesday, February 19, 2019

ldquo;The first thing most lenders look at when you want to buy a home is your credit history. Most people have traditional lines of credit such as credit cards, auto loans or a current mortgage that form a track record of how they manage debt,rdquo; said NerdWallet. ldquo;But if you have no credit history or whatrsquo;s sometimes called a nontraditional credit history, which is one with no credit card debt or other kinds of loans, it might be harder to establish a set of credit stats. That could make it tough to find a mortgage lender who will work with you.rdquo;

A just-launched program from Experian intends to help would-be buyers become better qualified. Called Experian Boost, the free, online platform allows consumers to ldquo;instantly influence their credit scoresrdquo; by using data from telephone and utility payments. ldquo;Itrsquo;s a first of its kind program designed to give more consumers access to credit,rdquo; said Experian.

How it works is: consumers grant permission to Experian Boost ldquo;to connect to their online bank accounts to identify and access utility and telecommunications payments,rdquo; per the companys >

ldquo;The amount a consumerrsquo;s score will be boosted depends on many factors, including current credit history,rdquo; Rod Griffin, Director of Consumer Education for Experian, told us. ldquo;Ultimately, the mortgage lender will make the final approval decision. The new self-reported accounts, or trades, will flow through the tri-bureau process for mortgage underwriting, giving lenders the view of new trades that were not visible before Experian Boost.rdquo;

According to the company, those with ldquo;thin credit files less than five trade lines and scores between 580 to 669 will benefit the most from Experian Boost.rdquo; Testing of the platform on a sample FICO reg; Scores showed an increase in two of three credit bureau scores and:

bull; ldquo;10 of thin-file consumers became scoreable
bull; For consumers with a score below 680, 75 saw an improvement in their credit score
bull; 14 of consumers with a credit score at or below 579 moved to a near prime score between 620 ndash; 679
bull; Depending on credit tier, 5-15 moved into a better score categoryrdquo;

The benefit to homebuyers is twofold: 1 Those who may not have been able to qualify for a home loan otherwise may end up with scores that are high enough to satisfy lenders; 2 A lower interest rate may be available for those who previously had subprime scores. This can save them tens of thousands of dollars over the life of a loan. ldquo;According to Credit Builders Alliance, having a subprime credit score will cost the average consumer approximately 200,000 more over the course of their life,rdquo; they said.

You can sign up for Experian Boost on their website.

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