Experian Boost - Don't Do It!

Reblogger Marte Cliff
Services for Real Estate Pros with Marte Cliff Copywriting

This is important information for home buyers, so read it and share it with your clients.

It could be a good tool for a young person just starting to build a credit profile, but it spells trouble for anyone eager to purchase a home in the near future.

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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Ambassador
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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

Marte,

Thank you for sharing this helpful info-it could be an expensive problem for home buyers.

May 16, 2019 10:13 PM #1
Rainmaker
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Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Marte I missed this post and needless to say not a fan of Experian... I am heading over to John's post to thank him, Endre

May 16, 2019 11:25 PM #2
Rainmaker
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Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Read this ....from the book of  "Too good to be True"...Yicks !

May 17, 2019 04:56 AM #3
Rainmaker
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Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Michelle Carr-Crowe Just Call 408-252-8900 Top 1%! - Yes, and even if their scores were OK without the boost, if the delay took too long, it could mean missing out on a house they loved.

Endre Barath, Jr. I guess this could be a good thing for a few people - like someone with no credit who needs it to rent an apartment, get phone service, etc. Otherwise - what a disaster!

 

 

May 17, 2019 09:32 AM #4
Rainmaker
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Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Sally K. & David L. Hanson Oh yes - that old "Too good to be true" book. It's always accurate.

May 17, 2019 09:32 AM #5
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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, Marte!

May 17, 2019 10:59 AM #6
Rainmaker
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Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

You're welcome John Meussner - I think this is important information.

May 17, 2019 11:13 AM #7
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Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Just going back and looking at this for the knowledge of it and just try to remember some of this advice because it’s really good!

May 18, 2019 10:59 PM #8
Rainmaker
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Marte Cliff
Marte Cliff Copywriting - Priest River, ID
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Laura Cerrano Any time something sounds "too easy" it probably is a good thing to avoid.

May 19, 2019 09:57 AM #9
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