This month saw the launch of a new tool called Experian Boost, designed to help you instantly increase your credit score. We explore how it works and how it could help you get approved for finance.
Netflix and other subscription services can help build your credit score in the UK Here’s how it works and why it’s effective
What is Credit?
Your credit score represents your creditworthiness and ability to repay debts. Lenders use your credit score to decide whether to approve you for credit cards, loans, mortgages, and more. The higher your score, the better your chances of getting approved and receiving favorable interest rates.
There are three major credit bureaus in the UK: Experian, Equifax, and TransUnion. They compile information from your credit accounts to calculate your score. Key factors include:
- Payment history – Do you pay your bills on time?
- Credit utilization – What percentage of your available credit do you use?
- Length of credit history – How long have you had credit accounts?
- New credit – How many new accounts have you opened recently?
- Credit mix – Do you have a variety of credit types like revolving and installment loans?
How Netflix Can Build Your Credit
Streaming services like Netflix allow you to establish a consistent payment history, one of the most important factors in your credit score By making regular on-time payments, you demonstrate responsibility Here’s how it works
1. Link Your Credit Card
Go to your Netflix account settings and update your payment method to a credit card instead of direct debit from your bank account. Using a credit card creates a record with the credit bureaus.
2. Set Up Autopay
Log into your credit card account and enable autopay so the full Netflix balance is paid automatically each month. Avoid carrying a balance and paying interest charges.
3. Make Payments on Time
This is crucial. Be sure you have enough funds in your bank account to cover the Netflix autopay each month. If you miss payments, it will negatively impact your score instead of helping.
4. Build Credit Over Time
As you make on-time payments month after month, you’ll build up your payment history. After about 6 months, you should start to see improvements in your credit score.
Why Netflix Works
There are a few key reasons why a Netflix subscription is effective for building credit:
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It’s inexpensive – Netflix only costs £6 to £18 per month. It’s an affordable way to start establishing credit history.
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Payments are regular – Netflix bills on the same date each month, allowing you to create a consistent on-time payment pattern.
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No credit check required – Services like Netflix, Spotify, and phone bills don’t require a credit check, so they are accessible to those starting with no credit.
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Can be used with secured cards – Secured credit cards require a cash deposit that acts as your credit limit. Using Netflix with a secured card is a great one-two punch to build credit.
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Easy to set up autopay – Enabling autopay is simple for subscription services, eliminating the risk of forgetting a payment.
How can you sign up for Experian Boost?
Experian Boost is a free tool. To access it, youâll need to create an Experian account or log in to your existing one.
Remember, you can withdraw Experianâs access to your banking data at any point if you change your mind.
How do Experian rate your credit score?
Experian is one of the three main credit reference agencies in the UK. (The other two are Equifax and TransUnion). Itâs worth noting that each agency uses their own scoring systems, so, youâll have different credit scores with each one.
Experian will rate your credit score on a scale of 0-999. They class a âgood scoreâ as anywhere between 881 and 960.
Lenders check your credit report when you make a credit application. The more responsible you are with borrowing, the higher your score should be â and the more attractive you should come across to lenders. You may find it easier to get credit and with lower interest rates as a result.
Grow Credit : Build Credit W/ Netflix Subscription & More
FAQ
Does Netflix improve credit score?
Simply put, subscription payments do not directly impact credit scores. However, if you use a credit card for subscriptions, timely payments can help build your score and might also help in improving your overall credit health.
Does a Netflix subscription build credit?
What types of subscriptions help build credit. Subscriptions that may help build your credit include streaming services (think Netflix® and Hulu®) and other recurring payments to applications on your phone (think Headspace® or Spotify®).
Does Netflix count as a bill for credit score?
Credit bureaus, credit-scoring agencies and fintech companies have devised a slew of credit-building programs in recent years that are marketed as ways to juice your credit score by factoring in on-time payments for everyday bills, such as rent, utilities or even Netflix.
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