Experian Boost - Don't Do It!

By
Mortgage and Lending with Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, NMLS #138061 MMCD #1141
https://activerain.com/droplet/5jmT

Experian Boost - Don't  Do It!

 

     You've perhaps seen Experian's latest marketing pitch on TV commercials for their "Boost" product - "Help Raise America's Credit Scores", the website hero image reads.  And yes, the product can do what it says - boost a user's credit scores.  That's great news, right!?!?  Well, no.

 

     All that glitters is not gold, and Experian Boost is a perfect example.  While yes, scores may go up, the product could also cause delays in the mortgage process, and disappointment for borrowers who find that their boosted scores aren't worth anything when it comes to getting a loan.

 

     Here's how it works:  A consumer signs up for Boost, and self-reports their own utility or other non-traditional tradelines to Experian.  The consumer's bank account is linked to Experian, so Experian sees payments being made to the utilities, reports them on their reports using FICO model 8, and BOOM - scores are up!   BUT, and a big ole' but, is that the report notates the account is self-reported:

Experian Boost self reported

     Therein lies the problem.  When a mortgage lender sees these self-reported tradelines, they'll require a borrower to remove them from their credit report - causing delay, and uncertainty over their credit scores, rates, and mortgage insurance costs.  As of now, Fannie Mae, Freddie Mac, and HUD will all require a borrower to "correct" their report before they'll approve their loan - that means conventional, FHA, VA, and USDA financing is off the table for any borrower using Experian Boost.  

 

     For those looking to get a home loan, it's important to know this information in advance.  One of the first questions a lender will ask is "do you know your credit score?".  A lender that doesn't know any better may overlook the self-reporting and set a borrower (and their real estate agent) up for failure.  Without an accurate credit report, a preappoval is worthless.  An approval through DU or any other automated system isn't accurate, and uncertainty prevails for anyone using Experian Boost.  

 

     Why would they create this product, then?  Well, although it's a hinderance to mortgage financing, it could benefit someone trying to build their credit from scratch.  If a consumer has a "thin" credit file, they may not have any score at all reporting.  Again, even if a score IS generated, it'll be useless for getting a mortgage, but it COULD help get other credit, open cards and other accounts that could eventually lead to a healthy credit profile, or offer other benefits.  So the program isn't all bad - it's just important to note that if you're going to be buying a home, using Experian Boost could cause delays and disappointment - and you won't see that in the program's advertising.

 

 

Want to work with a lender on top of the latest industry news and the best ways to make getting a mortgage easy?  Give us a call at 484-680-4852 or reach out and ask an expert!

 

This article was originally published at JMLoans.com

close

Re-Blogged 5 times:

Re-Blogged By Re-Blogged At
  1. Debra Leisek 05/16/2019 12:42 AM
  2. Andrea Bedard 05/16/2019 05:00 PM
  3. Marte Cliff 05/16/2019 09:57 PM
  4. Michelle Carr Crowe,Altas Just Call...408-252-8900! 05/16/2019 10:19 PM
  5. Joseph Domino 480-390-6011 05/17/2019 04:41 PM
Topic:
Real Estate Industry
Groups:
Mortgages
Tech Corner
"Whacked"!!!
Bananatude
Bartender, Make it a Double
Tags:
credit repair
experian
mortgage news
mortgage tips
boost

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
1,982,430
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

John Meussner - Such a booby trap for unsuspecting buyers and inexperienced agents. 

Thank you, for the warning! I was glad to see this one featured. 

May 16, 2019 06:31 PM #32
Rainer
104,084
Bernadette A. James
Serving Sugar Land, Missouri City, Richmond and Pearland - Sugar Land, TX
Broker-Associate, Keller Williams Realty SW

Great info. I wondered about this as Experian is really pushing it. 

May 16, 2019 08:05 PM #33
Rainmaker
584,935
Carolyn Roland-Historic Homes For Sale In Delaware and S. Chester County PA
Patterson-Schwartz Real Estate - Wilmington, DE
Carolyn Roland, GRI, CRS

John, That's what I get for fast forwarding through commercials. Never heard of this program and I hope none of my buyers try it! Thanks!

May 16, 2019 08:19 PM #34
Rainmaker
1,524,482
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Since I seldom watch TV, I hadn't heard of this. Thanks for sharing so agents can spread the word to their home buyers.

May 16, 2019 09:54 PM #35
Ambassador
1,983,977
Michelle Carr Crowe,Altas Just Call...408-252-8900!
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

While the idea behind it is intriguing, it could easily get problematic for home buyers currently in escrow or new to the home buying process.

May 16, 2019 10:15 PM #36
Rainmaker
3,186,986
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

John I missed this great post and I am here because of our friend Marte Cliff  reblog, indeed it is awesome advice and just to be clear I am not a fan of Experian...Endre

May 16, 2019 11:26 PM #37
Rainmaker
1,518,692
Amanda S. Davidson
Amanda Davidson Real Estate Group Brokered By eXp Realty - Alexandria, VA
Alexandria Virginia Homes For Sale

John, this is important and timely advice. It's only a matter of time before we see a post on how it killed a loan. Buyers beware for sure and great information for us to tell our clients about. Thank you! 

Carol Williams a suggestion for SCS :) 

May 17, 2019 04:42 AM #38
Rainer
2,970
Susan Wall
Mcessay - Albany, NY
I am creative writer.

Thank for sharing

May 17, 2019 07:27 AM #39
Rainmaker
311,345
Wayne L. Brown
Franklin Advantage Inc. - Alpine, CA

John

You hit this one out of the park.

Outstanding post.

Sad this information isn't out there by our industry as it should be.

Thanks for the post.

May 17, 2019 11:02 AM #40
Rainmaker
62,046
Ricardo Mello
Manhattan Miami Real Estate - Manhattan, NY
Manhattan & Miami Real Estate Agent

Interesting post John!

May 18, 2019 03:38 AM #41
Rainmaker
1,177,774
Sheri Sperry - MCNE®
Coldwell Banker Residential Brokerage - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

HI John Meussner - Congrats on the feature!  I think that will help let more people see this.  This may bite Experian if someone does not get a mortgage and they raise a lot of Cain.  There should be a disclosure to help potential buyers stay out of a lending issue. 

May 18, 2019 12:44 PM #42
Rainmaker
157,526
John Henry
John Henry Masterworks Design International, Inc. - Orlando, FL
Residential Architect, Luxury Custom Home Design

Hi John, very interesting info.  Great to know exactly how it affects someone, especially in a mortgage situation.  Thanks.

May 19, 2019 04:51 AM #43
Rainmaker
1,873,875
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good afternoon John Meussner -  I can't believe they are doing this.  That is why I find these bureaus reprehensible.

May 19, 2019 12:24 PM #44
Rainmaker
208,146
Joseph Domino 480-390-6011
HomeSmart - Scottsdale, AZ
Real Estate Made Easy

John Meussner Congratulations on a great article. I was one of the rainers that reblogged your article and it has been very well received by my followers. I learn something new everyday. Thank you.

May 20, 2019 10:23 AM #45
Rainmaker
1,518,373
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

Did not know that it would be seen as self reporting. I am going to say 'maybe not'. I signed up for it to see if I could get my phone bill on my credit report. I really do not have any debt or credit cards to speak of. 

The fact that my bank was not listed on their menu showed that anybody with a small bank is going to have a problem. #2 on how to solve that was set up Boost to see directly into Sprints account (mine) to get the totals there. Again - problems as the Sprint website would not play nice & sync with Boost.

Why bother? Because it just aggravates me that I pay all these bills each month & they aren't counted at all. Don't pay & they suddenly come into play.

I wanted to see if I could be a 'dumb consumer' & really got very frustated & am no where so far.  It is virtually impossible to get any type of response to help the situation from Boost.

May 22, 2019 10:30 AM #46
Rainmaker
2,498,158
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

This is important information for us to all know and understand, John!

May 24, 2019 06:13 PM #47
Rainmaker
2,742,376
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

i’ve only ever used resources that are free there. Thanks for the warning! All the best!

May 25, 2019 02:19 PM #48
Rainer
45,600
Kris Collis
Smart Way America Realty - East Stroudsburg, PA
Buy & Sell with Professional Results you Expect

John,

Thank you for this very important post that all agents should share with their buyer borrowers.  Thank you for brining this to light.  Info like this should be loud and clear from mainline media also, not below the radar.

Jul 02, 2019 02:03 PM #49
Anonymous
Jack

I am not a member, but I am buying a house and just started the process. I have been approved conditionally for the financing. A few weeks ago, I signed up for Boost and my Experian FICO did go up immediately 8 points. My loan officer mentioned that he saw that on my credit report and I explained how it works...that they scan my checking account. He had no problem with it and my take was that he was impressed I had taken that step.

Jul 04, 2019 12:35 PM #50
Anonymous
Jason

I did the boost and it did not move my credit at all. I am not sure why; I pay all my bills on time, but to get the best rate I have to be over 800 fico score. I was hoping this would help, however, It was not helpful at all.

Jul 13, 2019 05:43 PM #51
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Ambassador
884,419

John Meussner

#MortgageMadeEasy Walnut Creek, CA 484-680-4852
Ask an Expert!
*
*
*
*
Spam prevention