Council tax payments and subscriptions to Amazon Prime, Netflix and Spotify can boost UK credit scores from today under a new feature launched by one of the three biggest credit reference agencies.
Around 8 million customers in the UK can take advantage of Experian’s ‘booster’ service, which will allow them to use monthly payments to improve their chances of being accepted for a mortgage or credit card to lower borrowing costs.
earlier in the year, This is the money He said credit reference agencies can go this route With more and more people paying bills this way.
Experian’s “Boost” feature originally launched in the US in March 2019
The service will be free and customers can improve their credit score by up to 66 points, provided they agree to share their bank details with the reference agency.
The new feature, which initially launched in the US in March 2019, will take into account regular council tax payments, payments in savings accounts, Isas, and subscriptions to TV and other streaming services.
It comes as the coronavirus lockdown has seen a spike in the number of Britons who have subscribed to TV and other streaming services as they have been cooped up at home.
UK households collectively own around 27.1m subscriptions to Amazon Prime, Disney+, Netflix and Now TV, as part of a trend towards what UK payment regulators last year called “renting everything”.
The benchmarking agency, which helps with Equifax and TransUnion decide whether or not Britons are allowed to borrow money, said the service would only positively affect people’s credit scores.
It said that based on initial testing of the service, 51 percent of users could see an immediate increase in their credit score, while 12 percent rose in a full score range, for example from “fair” to “good.”
That’s the money it was reported for months that the subscription service’s data could be used by credit reference agencies
The Brits Experian credit score ranges from 0 to 999, with five bands ranging from ‘very poor’ to ‘excellent’.
The main way for consumers to improve their credit score has usually been to obtain credit and prove that they can handle it responsibly, whether that be a cell phone contract, a credit card, or a large-scale transaction.
But reference agencies are increasingly looking to other data sources to help “densify” consumers’ credit profiles to help provide more comprehensive information about their financial situation and daily spending habits.
| Trial credit score category | band records |
|---|---|
| so poor | 0-560 |
| poor | 561 – 720 |
| Exhibition | 721 – 880 |
| Good | 881 – 960 |
| excellent | 961-999 |
The new Experian service will use open banking data from customers’ bank accounts, which they can choose to share with reference agencies. All UK checking account providers allow customers to share their details in this way.
TransUnion’s director of data strategy, Dave Weber, previously told This is Money that open banking was a source of information that was “becoming increasingly available” to reference agencies and other lenders.
It said it “offers financing providers unparalleled insight into consumer affordability”, by allowing Britons to submit their checking account statements and transactions.
Andrew Hager, founder of personal finance website Moneycomms, called the launch “an excellent example of how open banking can deliver tangible rewards to customers.”
“The potential financial benefits of this new initiative may result in some customers enjoying access to more favorable interest rate terms and improved credit limits,” he added.
However, some may feel uncomfortable with not only the principle of sharing their bank details, but doing so with a company that was ordered two weeks ago by the Information Commissioner’s Office to ‘make substantial changes to how it handles people’s personal data within its direct marketing’. Services.’
Following an enforcement notice from the ICO, Experian has until July 2021 to inform people that it holds their data and how it plans to use it for marketing purposes. It also has until January to stop using personal data obtained through its credit reference business for marketing.
Some of the links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to influence our editorial independence.