Both Experian and FICO have released score boosters in 2019. The question is, does it help?
I have been researching this to find the pros and the cons and they both have both. So, what are they anyways?
Experian Boost – allows consumers to add their utility bills, cell phone bills, and other types of non-reporting items to their credit and get tradelines that would not normally add to their scoring algorithms to show up so that they can generate payment history and create or raise their existing scores. Sounds great, right? Well, the other side of that is they are also reporting new liabilities to your debt to income. Underwriters will add anything that is reporting as a monthly obligation to the reports as part of the debt to income so now a borrower who had tight debt to income, is over the threshold and can’t get approved for the mortgage they are hoping for.
If you have a low debt to income or have no credit score at all, this is a great way to add some of your accounts and generate scores quickly as a supplement. Just keep in mind, it does not appear to boost the scores in the same fashion as a revolving account would. If you just need a score, this can work. If you need to boost the scores, then there are no shortcuts and I would stay with the traditional approach of a secured card when you don’t have any revolving mixed into the algorithms.
FICO Ultra – This product allows the consumer to link their deposit accounts to the bureaus. That way creditors will be able to tell the running balances in their account to determine if the potential borrower is worthy of their product. For someone who always has savings but does not like using credit cards, this could be a solution for them. However, how much information do you really want the creditors to have? What happens if that person ever overdrafts their accounts? It is important to think about your habits over the last couple of years before you go linking this to the bureaus. It may help you get those extra few points or it might expose some bad habits from your past. There are also other great products such as rent reporting that will show your rental payment history, but if you have a missed or late payment, it shows no payment rather than a late one.
Either option is not going to give you a huge lift so if you really need the scores to improve, your best option is to get the reports as clean as you can while ensuring you have the proper education moving forward to keep scores escalated. As always, this is what we do best! Let us help you determine what the best options are to get you back to your lenders ready for home worthiness!
