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Improve your credit score for free: Experian Boost review

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(CNN) —  

CNN Underscored reviews financial products such as credit cards and bank accounts based on their overall value. We may receive a commission from Experian if you sign up for Experian Boost via the links on this page, but our reporting is always independent and objective.

Having a good credit score is important, since a strong score can give you access to the very best loans, mortgages and credit cards. But what if your credit score isn’t very good? Or you have a limited history with credit? Lenders can be reluctant to approve people with poor credit scores for new credit cards or loans, which makes it even harder to build — or rebuild — your credit history.

While there are a lot of “credit repair” companies that claim to fix your credit, they can be expensive, and it’s not always clear which ones have a less than stellar track record. However, there’s a relatively new way to potentially increase your credit scores in just a few minutes — and it’s free.

The feature is called Experian Boost™*, and it’s definitely legit. In fact, Experian® is one of the three main credit reporting agencies in the United States and has been in business for over 20 years, so it has a lot of experience with credit scores. But does Experian Boost actually improve your FICO® Score**, which is utilized by 90% of top lenders? Let’s take a look.

Experian Boost is designed to help give people credit where credit is due. By providing your information to Experian, you can get credit for on-time payments that aren’t normally part of your credit history, such as utility, telecom, cable and some streaming service payments.

On-time payments account for 35% of your FICO® Score, so if you’ve been on the ball in paying your utility bills, phone bills and even your Netflix® streaming service payments each month, you can add them to your credit report and potentially boost your FICO Score***.

Related: What’s a good credit score?

When you access Experian Boost, it allows you to connect your checking, savings and other bank or credit card accounts that you use to pay your monthly bills so that your payment history can be added to your Experian credit file.

As long as you have at least three consecutive months of payments within the last six months from the same account, Experian Boost will pick up positive payment activity and add it to your Experian credit file. Best of all, it won’t report negative payments — only those that were paid on time.

Click here to increase your credit scores for free with Experian Boost.

The Boost process is quite easy and takes just a few minutes. After creating an Experian account, you then link your financial institutions where you maintain your checking, savings or other bank or credit card accounts that you use to pay your bills, and enter your login credentials to seamlessly link them.

If you have multiple accounts at the same financial institution, Experian allows you to select which accounts you want included so you can just add the accounts you use to pay your bills.

Once you’ve linked your accounts, Experian will automatically go through all your recent transactions and identify payments that qualify to be added to your Experian credit file, such as utility bills. It then shows you a list of eligible bills and allows you to select which ones you want to add to your report.

Experian Boost keeps you informed as it searches for potential payments that can improve your credit scores.

PHOTO: Experian

Experian Boost keeps you informed as it searches for potential payments that can improve your credit scores.

Make your selections and within moments, Experian Boost factors in the new information and shows you your new (hopefully improved) FICO® Score. Since Experian Boost doesn’t include missed payments, your FICO Score won’t go down, but it might not change if there either isn’t enough information from the added accounts or your FICO Score is already relatively high.

Even if it doesn’t make a difference to your FICO® Score, the process is as easy as it sounds and literally costs nothing. And once you have it all set up, Experian Boost will continue to monitor your payments, and may increase your credit scores if future payments make a difference.

Use your on-time payments to improve your credit scores with Experian Boost.

It depends. According to Experian, US users have boosted their FICO® Scores by close to 45 million points, and the average FICO Score has increased 12 points when using Experian Boost. Those with little to no credit history and those with very poor to fair credit generally see the biggest FICO Score increases.

We tried Experian Boost ourselves and found the process to be very straightforward, but we didn’t see any increase in our credit scores. That’s likely because the CNN Underscored reviewers who tried it already pay their bills on time and have high credit scores to begin with.

Our reviewers didn't see any change to our FICO® Score with Experian Boost, but people with little to no credit history and those with very poor to fair credit generally see the biggest increases.

PHOTO: Experian

Our reviewers didn’t see any change to our FICO® Score with Experian Boost, but people with little to no credit history and those with very poor to fair credit generally see the biggest increases.

But people who pay their bills through their bank account and don’t have a longstanding credit card or loan history may see a bigger impact. That’s because you’ll start to fill in your “payment history” component of your FICO® Score, which is one of the most important factors in a credit score.

There aren’t really any true disadvantages of Experian Boost — the worst that can happen is it doesn’t change your FICO® Score. It doesn’t cost anything, and it won’t hurt your credit, so the only thing you might lose is a few minutes of your time to set it up. The Experian membership also provides your FICO Score for free on an ongoing basis, which is useful to have as you work to improve your credit rating.

However, there are a few caveats to keep in mind. First, Experian Boost only adds these positive payments to your Experian Credit Report — it can’t add any information to reports from other credit agencies, such as Equifax or TransUnion. So if you apply for a credit card and the lender pulls your credit report from another bureau, the lender won’t see boosted credit scores.

Related: Does opening a new credit card hurt your credit score?

You’ll also find that the tool doesn’t work for bills that aren’t in your name, even if you contribute to them. For example, if you live with roommates and send your portion of the gas bill to your roommate via Venmo or PayPal, or give them a check or cash, Experian Boost won’t pick up those payments.

Finally, some people aren’t comfortable providing their bank login to a third party. According to Experian, when you use Experian Boost, Experian only uses your bank credentials to capture your ongoing positive payments and identify any potential new boosts.

For additional protection, Experian also makes sure the name and address on your bank account matches what’s on your Experian membership profile. Still, if you’re concerned about privacy, you might decide that the upside of Experian Boost isn’t worth handing over your personal information.

If your FICO® Score could use some help, there's essentially no downside to trying Experian Boost.

PHOTO: iStock

If your FICO® Score could use some help, there’s essentially no downside to trying Experian Boost.

Frankly, yes, especially if your credit scores could use some help. Not everyone’s FICO® Score will increase with Experian Boost, but the service is free, and it only takes a few minutes to enter your information and connect your accounts. There’s very little downside to using the feature, and you can always remove the added payment history from your Experian credit file down the line if you want.

The best way to permanently improve your credit scores is to methodically whittle down your debt by paying your loans, mortgages and credit card bills on time every month. But that process can take time, so in the interim, try potentially giving your credit scores a little boost for free with Experian Boost.

Learn more about improving your credit scores with Experian Boost.

*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.

**Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO Score than FICO Score 8, or another type of credit score altogether. Learn more.

***Experian and the Experian trademarks used herein are trademarks or registered trademarks of Experian and its affiliates. The use of any other trade name, copyright or trademark is for identification and reference purposes only and does not imply any association with the copyright or trademark holder of their product or brand. Other product and company names mentioned herein are the property of their respective owners.

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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