Right now, Experian and FICO are offering what they call “credit score boosting” programs, Experian Boost and UltraFICO. Both are free and supposedly could help an individual increase their credit score by about 10 to 40 points.
There are reports all over the internet which might lead you to believe that the credit score boosts are the best thing since sliced bread. But actually it’s not that simple.
Sure, to anyone who’s worried about their credit score, a “free boost” can look very appealing. But there are two significant things to consider regarding these credit-score boosting opportunities.
First, 10-40 points isn’t all that much. It might not make a real difference to most lenders. Plus you need to bear in mind that if your lender uses one of the other credit reporting services, an Experian boost wouldn’t make any difference at all.
And second, for that modest 10 to 40 point boost, you have to provide access to some very significant personal information like your cell phone and utility payments (Experian) or your bank accounts (FICO).
Since the boost is “free,” you might well start wondering if it’s actually your personal information that’s the valuable commodity here. It has to be, right?
People world-wide are becoming more concerned and even alarmed about what tech companies and their 3rd-party partners know about individuals. People are worried about how that information is being packaged and sold, and to whom.
All the evidence is that it’s right to be wary. Because – when it comes to the internet – as the saying goes, “When you’re not paying for the product, you are the product.”
How information is collected and processed and sold online may change one day. Hopefully soon. But, for the time being, refusing to give access to your information (when you have a clear choice) is probably the wisest course.
And then there’s this – a low credit score usually indicates that someone already has more debt than they can comfortably repay. Some consumer rights experts are questioning whether a “boost” that may allow more borrowing is helpful for people already in financial difficulty. The bottom-line? There are exceptions but usually it’s not.
No matter whether you believe your credit score is awful or fantastic, the way to know for sure how it will affect you is to sit down with your lender before you apply for a loan and get an idea of how they see your credit score as part of the big picture. (If you’re planning to apply for a mortgage, most banks are happy to do this at no charge as part of the pre-approval process.)
You may be pleasantly surprised. You may have work to do. Either way, going through that process makes you a more informed consumer, which is always a plus.
All things being equal, having a higher credit score is better. But there’s a reason why there are ranges. Being in the range tends to be good enough. You don’t have to feel pressured by the idea that getting a slightly higher score is worth giving away access to data that really should be private. Talk to your lender first.
If your credit score actually is low and you’re worried, the good news is that it can be improved substantially over time with some effort on your part. Find a lender you can talk with, an objective professional who can give you an idea of the best next steps in your particular situation.
As in most parts of life, increasing your credit score by your own efforts will do more for you than a many-strings-attached “free boost” ever would.
Nick Maffeo is the President & CEO of Canton Co-operative Bank in Canton. “Smart About Money” is a regular column he writes for the Canton Citizen. Have a financial question you’d like to ask? Email to info@cantoncoopbank.com.