Homeowners who subscribe to streaming services like Netflix or Spotify now stand a better chance of getting approved for a mortgage from Leeds Building Society.
The lender is now the first mortgage provider in the UK to use payment data captured by Experian Boost, the company’s open banking tool.
The lender will now consider regular debit payments that don’t typically show up on credit reports when evaluating applications for home loans.
Which? examines Experian Boost’s operation as well as additional strategies for raising your credit score here.
Yes, Netflix can help you build credit in the UK! In fact, any regular subscription payment you make can be used to boost your credit score. This is thanks to a new initiative called Experian Boost, which allows you to connect your bank account to your Experian credit report. This gives Experian access to your payment history for things like utilities, subscriptions, and council tax.
Here’s how it works:
- Sign up for Experian Boost: It’s free and easy to do. Just head over to the Experian Boost website and create an account.
- Connect your bank account: Experian will use this to access your payment history.
- See your credit score increase: Once your bank account is connected, Experian will start adding your positive payment history to your credit report. This can boost your credit score by up to 101 points!
Why is this important?
Having a good credit score is important for a number of reasons. It can help you get approved for loans and mortgages at better interest rates, and it can even help you get a better job.
Is Netflix the only subscription that can help build credit?
No! Any regular subscription payment you make can be used to boost your credit score. This includes things like your phone bill, your gym membership, and your Spotify subscription.
What are the benefits of using Experian Boost?
- It’s free to use.
- It can boost your credit score by up to 101 points.
- It’s a safe and secure way to share your financial information.
- It can help you get approved for loans and mortgages at better interest rates.
What are the risks of using Experian Boost?
There are no real risks associated with using Experian Boost. However, it’s important to remember that it only reports positive payment history. This means that if you miss a payment, it won’t be reflected in your credit score.
All things considered, Experian Boost is a fantastic method to raise your credit score and facilitate loan and mortgage approval. If you live in the UK and have Netflix, I strongly advise you to sign up for Experian Boost right away!
Frequently Asked Questions
Q: How much does Experian Boost cost?
A: Experian Boost is completely free to use.
Q: Is Experian Boost safe?
A: Yes, Experian Boost is safe to use. Experian is a reliable source of credit information, and they value data security greatly.
Q: How long does it take for Experian Boost to work?
A: Once you’ve connected your bank account, Experian will start adding your positive payment history to your credit report. You should see your credit score increase within a few days.
Q: What if I miss a payment?
A: If you miss a payment, it won’t be reflected in your Experian Boost score. However, it’s important to remember that missed payments can still damage your credit score.
Q: Can I use Experian Boost to improve my credit score in other countries?
A: No, Experian Boost is currently only available in the UK.
Q: What other subscriptions can I use to build credit?
A: Any regular subscription payment you make can be used to build credit. This includes things like your phone bill, your gym membership, and your Spotify subscription.
Q: What are the benefits of having a good credit score?
A: Having a good credit score can help you get approved for loans and mortgages at better interest rates, and it can even help you get a better job.
Q: What are the risks of having a bad credit score?
A: Having a bad credit score can make it difficult to get approved for loans and mortgages, and it can even cost you more money in the long run.
Q: How can I improve my credit score?
A: There are a number of things you can do to improve your credit score, such as paying your bills on time, keeping your credit utilization low, and avoiding opening too many new credit accounts.
Q: Where can I get more information about Experian Boost?
A: You can find more information about Experian Boost on the Experian website.
What’s a good credit score rating?
Experian, TransUnion, and Equifax, the three major credit reference agencies in the UK, each have a scale for determining what constitutes a good or excellent credit score.
The table below shows how the banding for Experian works. The average credit score achieved by borrowers is 797.
| Experian credit score bands | Credit score range | Deals available |
|---|---|---|
| Very poor | 0 – 560 | There is a likelihood youll be declined a loan. Deals offered will have high rates. |
| Poor | 561 – 720 | Could be offered a mortgage, yet the rates will likely be high. |
| Fair | 721 – 880 | Deals with reasonable rates could be offered to you. |
| Good | 881 – 960 | Most but not all the best mortgage deals will be available. |
| Excellent | 961 – 999 | The best mortgage deals with lower interest rates will be available to you. |
Source: Experian
Having a good or excellent credit score can be helpful, but it’s not a guarantee that all lenders will give you credit or treat you fairly.
You might be accepted by one lender but rejected by another because each lender uses a different method to determine whether or not to lend to you.
What is Experian Boost and how does it work?
It is a free add-on tool run by credit reference agency Experian.
Boost evaluates real-time banking data by granting Experian access to your accounts; this data is not typically included in credit scores.
Credit scores are raised by taking into account the previous year’s regular debit payments, which include things like council tax, savings and investments, and memberships to services like Netflix, Spotify, and Amazon Prime. Those with a good financial track record can therefore benefit.
Experian says no credit scores are ever reduced as a result of Boost.
- Find out more: sharing your financial data with open banking