Experian Boost - Don't Do It!

Reblogger Andrea Bedard
Real Estate Agent with Thompson Company, REALTORS® MD594797

Have you seen ads announcing Experian's new feature, "Boost"? Please read the info warning by John Meussner, JM Loans, below - especially if you are thinking about buying a house in Silver Spring, MD anytime soon and need to apply for a mortgage. There is no overnight quick fix to improving your credit score, stick to the basics: pay your bills and pay them on time, but don't try to "boost" it. 

Original content by John Meussner NMLS #138061 MMCD #1141

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

John Meussner

NMLS# 138061

Visit My Website!

 

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what is experian boost
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Rainmaker
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Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

Great choice for a reblog, it is so sad that our world is filled with scams these days.  Even companies that are supposed to be trustworthy offer scams.

May 17, 2019 07:09 AM #1
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John Meussner
Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, - Walnut Creek, CA
#MortgageMadeEasy Walnut Creek, CA 484-680-4852

Thank you for sharing this important info, Andrea!

May 17, 2019 10:58 AM #2
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Yikes!  It did seem odd to me that someone could boost their score by doing anything proactive like signing up for an app.  Thanks for the warning.

May 19, 2019 09:07 AM #3
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Andrea Bedard
Thompson Company, REALTORS® - Silver Spring, MD
M.A.; REALTOR® Silver Spring, MD and beyond

Hi Brian, the thing is that it looks like a good idea at first glance, and helpful to anybody who is thinking about buying but doesn't have the best credit. Good thing we have the best people here in the Rain to alert us to things like these!

Thank you John

Chris Ann, I am afraid that too many will trust the name Experian and believe that it will help them get better loan conditions. Hopefully many will do some research first and come across John's post before attempting to boost! 

May 19, 2019 06:01 PM #4
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Andrea Bedard

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