What is Experian?
Established in 1980, Experian is a credit reporting agency, which currently operates in 37 countries. Like the other bureaus, Equifax, and TransUnion, it provides consumers with credit reports. These credit reports assist the lenders in evaluating if they should take a risk on a consumer or not.
One of the main advantages of Experian is that it is extremely thorough with the reports. Lenders can quickly go over the credit reports of the borrower provided by the credit reporting agency and take into account the credit history and past debts to make a sound decision. However, a lender does not only focus on Experian but looks at reports from all three bureaus.
It has been six months to a year since Experian Boost was launched, and over 4 million people have opted for it in a short period. According to aithority.com, 29 million points have been added to the scores of consumers.
It is quite difficult for lenders to trust consumers, and the existing bureaus help the consumers in boosting their scores, which help with many things such as auto loans, mortgage loans, loans in general, and so on.
The Impact on Points
Regarding the points in scoring, there seems to be a discrepancy. The report states that there are over 4 million users of Experian Boost, and 29 million points have been added to the consumer scores. The average increase in points is calculated to be 7.25 in line with the report.
However, Experian.com and other sources are claiming an increase of an average of 13 points. But based on the data that was provided in the report, it is only an average of 7.25. Hence, customers should not expect a 50 point jump or a 20 point jump, but somewhere from between an increase of 7 to 13 points. 13 points is stretching it, but let’s give them the benefit of the doubt.
What does Experian have in store for its customers?
The Covid-19 pandemic is something that the world had to adapt to. As a result of the lockdown, millions had to stay and work from home, and as a result, television streaming, including Netflix, increased by 85%. Experian is one of the many companies who took advantage of this and capitalized on the situation; adaptation is the key to survival.
Recently, Experian has announced that its new product, Experian Boost, which was launched not too long ago, will now allow consumers to add video streaming payment history to their Experian credit reports. Previously, only utility and telecom bills were taken into account, and now there’s an additional option of video streaming to boost credit scores! Not only that, but consumers will be provided with recommendations for extra utility and telecom accounts, which did not qualify before.
The customers could include their cable bills before as well, but now there is a definite addition of streaming services, as consumers are now decreasing the use of cable services and moving onto streaming services.
This addition to the credit scores provides hope to consumers and helps them come out of the pandemic with better financial security during these uncertain times, which the world has not seen before.
The strong payment history of the consumers now benefits them with their credit scores. This new announcement helps both Experian as well as provides the consumers a reason to opt for Experian, as let’s face it, Netflix is a commodity not many can live without, especially during these last five months.
How does Experian operate?
The way Experian operates is that they access the data through bank records; for that to happen, a consumer has to opt-in for Experian through a third party company. And via this technology, the bank records are searched for relevant transactions related to utility and telecom. And they will add the payment history to the credit reports. The bills that did not qualify before for credit scoring can be added and taken into account.
The Impact on Credit
Only positive data gets added, and a consumer can choose to opt-out anytime. Moreover, consumers can also remove the data from their files anytime they want. But an important point to note is that the newer versions of Vantage are used, such as Vantage 3.0, Vantage 4.0.
The problem lies therein as most lenders use older versions; for example, auto lenders and mortgage lenders use older versions of credit scoring analytics. Some credit card companies use newer versions to help there, but then again, it is only applying to Experian. The same case is with FICO (Fair Isaac Corporation); it can only work for FICO 9 or newer versions.