Here’s how your Netflix subscription can now help your credit score
Americans who subscribe to Netflix (NFLX) can now use their streaming payment history to help their credit score.
Experian added the streaming service to its Experian Boost tool that allows you to add your utility and telecom — and now Netflix — bill payments to your credit report at the bureau. The information in your credit report is used to calculate your FICO credit score.
The move could help many Americans build their credit history and improve their credit score, especially younger people or immigrants who don’t have much access to other loans and credit.
“I was wondering when this was going to happen,” John Ulzheimer, a credit expert who formerly worked at FICO and Equifax, told Cashay. “You were already able to add utilities and phone accounts to your Experian credit report, so this is a natural expansion into the streaming/pay TV environment.”
How does it work?
Experian Boost is free. You will need to provide the details of the bank account or credit card that you use to pay your Netflix, telecom, or utility bills. That information remains private. You then choose and verify which bill history to add to your Experian credit report.
Only payment histories that will help your credit are collected by the platform. You can also remove your data from your Experian credit file at any time.
Does it work?
More than 4 million Americans have connected their accounts, according to Experian. The average increase after signing up for the service is 13 points, the bureau found. While not huge, the increase could put some consumers into a lender’s higher credit tier that could mean more access to credit at better interest rates and other terms.
For instance, a borrower with a 670 FICO credit score would be offered a 3.285% rate on a $200,000 30-year fixed mortgage, resulting in a $874 monthly payment, according to MyFICO.com. But if that same borrower’s credit score is 10 points higher, the mortgage rate would instead be 3.071%, resulting in a a monthly payment of $851.
The service doesn’t apply to your TransUnion and Equifax credit reports, which lenders also use to calculate your credit score when you apply for credit. If you apply for a credit card from a bank that uses TransUnion or Equifax — instead of Experian — the boost from your Netflix payment history won’t be reflected in those credit reports the bank pulls for you.
Janna is an editor for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @JannaHerron.
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