Every week we release educational videos related to hot topics in the mortgage industry on YouTube.
Subscribe to our channel to stay in-the-know!
What You Need to Know About Experian Boost and How It Affects Buying a Home
Jennifer Hernandez • November 7, 2024
As you prepare for homeownership, understanding your credit score and how tools like Experian Boost may impact it can be essential for success. While Experian Boost can offer a quick way to potentially increase your score, lenders don’t always view it favorably in the mortgage process. Here’s a breakdown of what Experian Boost is, why it may not be ideal for home buyers, and how to set yourself up for mortgage approval.
What Is Experian Boost?
Experian Boost is a relatively new tool that allows consumers to add on-time payments for non-traditional items like rent, utilities, phone, and streaming services to their Experian credit report. Since these types of bills aren’t typically reported to the credit bureaus, Experian Boost can increase your score by incorporating timely payments from bills not usually factored into credit. For those trying to establish or improve their credit, adding these bills can help reflect a positive payment history and theoretically give a “boost” to your score.
How Experian Boost Is Viewed by Mortgage Lenders
While Experian Boost may seem like an easy way to enhance your credit report, most mortgage lenders view it differently. The added non-traditional payment data—such as utility and phone bills—do not reflect creditworthiness in the way that traditional credit items, like loans or credit cards, do. Lenders don’t allow a consideration of the Experian Boost because these additions artificially inflate your score without demonstrating long-term credit management.
As a result, many lenders may require you to remove these Experian Boost entries from your report to evaluate your “true” credit score. They want to see your credit history based on traditional items. So, while Experian Boost could improve your score in certain cases, when it comes to the home-buying process the lender will remove these added items.
Why Doesn’t It Count?
Understandably, it can feel frustrating that your diligent, on-time payments for rent and utilities aren’t seen as equally important in the mortgage process. These monthly payments represent responsibility and reliability, so it seems logical they would contribute to your credit score. However, traditional credit reporting and lending guidelines follow strict standards on what is included, focusing on items that directly relate to credit usage and long-term financial management, like credit cards, loans, and other revolving accounts.
Preparing for a Home Purchase: Key Steps to Take
If you're looking to purchase a home, it’s important to understand what lenders see in your credit history. Starting with a pre-approval process 6 to 12 months before buying is a wise step. This timeline gives you an opportunity to work with a lender to evaluate your credit profile, understand any adjustments you may need to make. Lenders are on your side…they want to help you get to the point of becoming a homeowner. By working with a lender early on, you’ll have the guidance and insights needed to make smart credit decisions and enhance your credit score in ways that mortgage lenders value.
How to Improve Your Credit Without Experian Boost
If you’re advised against using Experian Boost by your lender, there are other ways to build and improve your credit score over time. Here are some tried-and-true methods:
- Pay Down Credit Card Balances: Reducing your balances on revolving credit accounts, such as credit cards, can significantly improve your credit score by lowering your credit utilization ratio to 1/3.
- Keep Oldest Accounts Open: While you may be tempted to close all accounts you don’t use, keeping your oldest accounts open can benefit your score, as it contributes to your credit history and overall utilization rate.
- Avoid Opening New Accounts Right Before Buying: Each new account can temporarily lower your credit score and make lenders wary. Try to hold off on any new credit activity at least six months before applying for a mortgage.
- Make Consistent, On-Time Payments: Late or missed payments have a big impact on your score, so make it a priority to keep all payments current. This is one of the biggest factors in building a solid credit history.
- Monitor Your Credit Regularly: Check your credit report for errors or any signs of identity theft, as correcting mistakes can give your score an instant boost. Regular credit report monitoring is essential for staying informed of any changes, especially when preparing to buy a home. By checking your report frequently, you can catch and address any inaccuracies that may impact your credit score. MyFICO offers easy access to your credit information, making it simple to stay on top of your financial health.
- Get Professional Advice: If you’re unsure where to start, credit counseling can be a great resource to create a tailored plan for improving your credit based on your unique financial situation. If you're interested in knowing more about credit score when applying for a loan feel free to read this blog “ The truth about credit when buying a home”
The Value of Pre-Approval
Pre-approval is one of the best ways to set yourself up for success when buying a home. A pre-approval allows a lender to review your financial history, including your income, credit score, and other key factors, to give you a clear picture of your borrowing capacity. Not only does pre-approval give you an accurate idea of what you can afford, but it also highlights any potential issues with your credit that you can work on beforehand. A trusted lender will give you tasks to help boost your credit so you can get the best interest rate available.
Starting this process early gives you the time needed to address any credit adjustments before you’re in the position of applying for a mortgage.
Is Experian Boost Worth It for You?
Experian Boost might seem like a way to increase your credit score, but if you’re planning to buy a home, you should think carefully before using it. Mortgage lenders view the Experian Boost as a manipulation of your credit score. Instead, working with a lender early in the home-buying process allows you to understand what’s needed for mortgage approval and helps you set realistic credit goals. Learn more about Experian Boost here.
If you’re serious about buying a home, check out my video, why it’s important to get pre-approved six months before buying a home. It offers valuable tips for maximizing your credit and financial profile to help make the home-buying process as smooth as possible.
By taking steps now, you’ll be well on your way to achieving your homeownership dreams, armed with the knowledge you need to make the best financial decisions. Get in touch with a mortgage expert to guide your home-buying journey.
Explore hidden savings on new construction homes. Get expert guidance to maximize your benefits today!
Googling mortgage questions? A loan officer gives you personalized answers Google can't. Houston loan officer with 30 years of experience explains why.
Learn about seller credits & rate buydowns for Houston homebuyers. Get the best incentives to save on your first home purchase!
You've been looking at homes for months. Your sister offers to go in with you. Or your partner says let's do this together. Or a parent says, I'll help you qualify. Or a friend says we should buy a rental property. Suddenly that home you couldn't afford alone becomes possible. Co-owning property can absolutely be a smart move. It can get you into a home sooner, help you build equity faster, and turn a “ maybe someday ” into “ We're doing this! I've seen it work beautifully for hundreds of families over the years. But I've also seen it go sideways. Not because people had bad intentions, but because they skipped the hard conversations and left the details to chance. When co-ownership isn't structured right from the start, it doesn't just cause tension. It can turn into an expensive, exhausting legal mess that takes years to untangle. Here's what you need to know before you sign anything.
Title insurance in Texas explained by a loan officer with 30 years' experience: what it protects, why rates are state-set, and who pays at closing.
Texas seniors can now exempt up to $200,000 from school taxes and transfer their tax freeze to a new home. Before buying a townhome or 55+ condo, ask these three HOA questions. Get smart downsizing tips from Houston loan officer Jen Hughes Hernandez.
Learn how collections impact your home buying journey. Get tips to navigate credit issues and secure your mortgage today!
If you're a first-time homebuyer in Houston, you've probably felt that sinking feeling when you calculate how much cash you'll need upfront. Between the down payment, closing costs, and reserves, it can feel like you need tens of thousands of dollars just to get your foot in the door. But here's what many Houston homebuyers don't realize: there are numerous programs designed specifically to help with these upfront costs—and you might qualify for more help than you think. The problem isn't that assistance doesn't exist. The real issue is that most people simply don't know what's available or what questions to ask their lender. I've worked with countless Houston homebuyers who were genuinely surprised to discover they had options they never knew existed. That's exactly why it's so important to explore every possibility before you assume homeownership is out of reach. In this post, we'll walk through the types of assistance programs available to Houston first-time buyers, why so many people miss out on them, and how to make sure you're not leaving money on the table. Why Most Homebuyers Miss Out on Closing Cost Assistance Here's a scenario that plays out all too often: Someone decides they want to buy a home in Houston. They talk to a lender, get pre-approved, and then start house hunting. But when it comes time to discuss the actual costs to close, they're overwhelmed by the numbers and assume they just need to save more money. What they don't realize is that their lender might not have mentioned—or they might not have asked about—assistance programs that could cover thousands of dollars in upfront costs. The challenge isn't just a lack of programs. It's a lack of awareness. Many buyers simply don't know what questions to ask, and unfortunately, not every loan officer takes the time to explore every option with their clients. That's why working with a knowledgeable Houston mortgage professional who actively looks for ways to help you is so valuable. Types of Closing Cost Assistance Available in Houston Houston first-time homebuyers have access to several types of assistance programs, and the good news is that you might qualify for more than one. Here's what's out there: Down Payment Assistance Programs These programs can provide grants or low-interest loans to cover part or all of your down payment. Some are specific to Texas, while others are available through federal programs. The Texas State Affordable Housing Corporation (TSAHC) and the Texas Department of Housing and Community Affairs (TDHCA) both offer programs that Houston buyers can access. Closing Cost Grants Beyond down payment help, many programs also assist with closing costs—the fees you pay to finalize your mortgage. These can include appraisal fees, title insurance, origination fees, and more. Grants don't need to be repaid, making them especially valuable. Seller Concessions In some market conditions, you can negotiate for the seller to cover a portion of your closing costs. This isn't a formal "program," but it's a strategy that can save you thousands when structured correctly. Employer Assistance Programs Some major Houston employers, including hospitals, universities, and corporations, offer homebuyer assistance as an employee benefit. It's worth checking with your HR department to see if this perk exists at your company. What You Should Ask Your Lender Don't wait for your lender to bring up assistance programs—take the initiative. Here are the key questions you should ask: "What down payment assistance programs am I eligible for based on my income and the home price I'm targeting?" "Are there any grants available that don't need to be repaid?" "Can I combine multiple assistance programs?" "What are the requirements or restrictions if I use these programs?" Remember, not all lenders are equally knowledgeable about every program available. If your lender seems unsure or dismissive, that might be a sign you need to work with someone who specializes in helping first-time buyers navigate these options. Don't Count Yourself Out Too Soon One of the biggest mistakes Houston homebuyers make is assuming they don't qualify for help before they even apply. Income limits for assistance programs are often higher than people expect, and there are programs designed for moderate-income buyers, not just those in financial hardship. The only way to know what you qualify for is to actually explore your options. That means having detailed conversations with your lender, doing your own research, and being willing to ask questions even if they feel basic. This is your financial future—there's no such thing as a dumb question