Free Credit-Boost Programs: The Hidden Costs Behind a Higher Score
New Ways to Boost Your Credit Score
New ways to instantly increase your credit score are sprouting up. Given that so much of modern financial life — including access to credit cards, loans and apartments — hinges on those three digits, signing up for a program to quickly boost your credit score may sound like a no-brainer.
How Credit-Building Programs Work
The lifeblood of our economy is credit. In the simplest of terms, credit is an agreement that a borrower will pay back the money they owe to a lender. Credit scores are a way to quickly gauge how likely a borrower is to pay back the money on time.
Beware the Fine Print
It may come as a surprise, but you don’t have just one credit score; you have dozens. The two most popular types of scores are FICO and VantageScores. They are brand-name scores, so to speak. Those two types are then broken down into several different versions, from FICO Bankcard Score 9 to VantageScore 4.0. Different lenders and creditors check various different models when you apply.
‘Privacy Costs’ of Juicing Your Score
Maybe your FICO Score 8 did improve 13 points under Experian’s program, but the lender you’re applying to doesn’t check that specific score. Now you’ve handed over your personal data without an actual benefit. That scenario is central to what Jones refers to as the “privacy costs” of using these types of programs.
The Risks of Providing More Data
Consumer advocates worry, though, that even when the person applying knows exactly how the programs work and what data they’re choosing to give up, providing the credit bureaus with evermore access to sensitive data poses risks on its own. “Continuing to use the Big Three as the conduit for data brings a host of problems, including accuracy problems,” Nelson says.
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