Last Updated: March 4, 2023
Are you looking to boost your credit score?
Subscriptions can help you build and improve your credit, and there are a few ways to do this.
How you do it makes a difference. If you want to use subscriptions to build your credit, there are some things you can do to help make that happen. So why Netflix and chill, when you can Netflix and score points on your credit report?
Subscription services can help you build your credit, but only if your payment history is reported to the credit bureaus - Experian, Equifax, and TransUnion, or if you use a credit card as a payment method.
You can make sure this happens by paying your bills with a credit card or by signing up for a service that tells the credit bureaus about your payment history.
Your monthly payments for subscription services will be listed on your credit report when your payment history is sent to the credit bureaus. This can have a good or bad effect on your credit score.
If you miss a payment, it could hurt your credit score, but making payments on time could help it.
More than 4 million people have connected utility and telecom accounts such as Netflix and Hulu to platforms such as Experian Boost, which adds such payments to their credit reports.
CNBC reports that such customers are seeing an average 13-point increase in their credit score. If you’re a longtime Netflix user, paying your Netflix account balance every month can count as an on-time payment on your credit report.
One major advantage of using subscriptions to build your credit is that most times, our subscription payments are automated and recurring.
We automate subscriptions to our favorite streaming platforms so we don't think when making payment. Other times, we pay over longer periods such as 3 months or a year-long, especially when we get discounts for doing such.
By paying our subscription we are achieving 2 goals:
So it's like we are rewarding ourselves for binge-watching!
This makes it a good way to unconsciously build credit and is far better and easier than paying credit card balances monthly which seems like we are repaying our debts (which is what it is!).
Here are some tips on how to use subscriptions to boost your credit score.
Most likely, you'll pay for subscription services by setting up automatic bill payments.
There are, however, some things you can do to set up your automatic payments in a better way so that they help you build credit.
When you sign up for a subscription service, you'll be asked how you want to pay.
The easiest thing to do is pay with a credit card to authorize recurring charges. You can, of course, do this with your debit card or by giving the company your banking information.
But if you don't sign up for a credit reporting service, most likely your payment history won't be sent to the credit bureaus unless you pay with a credit card.
Set up automatic payments from your bank account to make sure you pay your credit card bill on time.
That will make it less likely that you'll miss a payment deadline. If you pay the bill on time, you won't have to pay any interest. This is one way to save money on streaming services.
Experian Boost is a free feature that helps you boost your credit score by paying your monthly bills on time.
Most of the time, your credit score is only based on your credit card payments and other loans, like student loans, auto loans, and mortgages.
But using this feature for your payments for streaming services, phones, and utilities "counts" towards your Experian credit score.
Your credit score will go up if you pay your HBO, Hulu, Disney+, and Starz bills on time through this service. Anyone can sign up for Experian Boost, but the people who benefit the most are those with little or no credit history and very low to fair credit scores.
Kikoff Credit gives you a $500 balance or a line of credit that you can use over and over again.
You can build credit by buying something in their store for as little as $10.
They also don't check your credit, so you don't have to link your bank account and it won't hurt your score. There are no administration fees, annual fees, late fees, finance charges, or end dates with Kikoff.
The company doesn't check your credit, and you don't have to pay a deposit to get started. Instead, you pay $2 per month for a membership that has no interest and no extra fees. Memberships are for a year, but you can cancel and pay off your balance at any time.
Kikoff sends reports to credit bureaus such as Equifax and Experian, though it can take up to six weeks for that information to show up on your credit report. You can check your score on your account, and they'll send you an email if anything changes.
Grow Credit is a credit card that helps you to develop credit when you pay for monthly subscriptions, such as qualified utilities, TV, music, and streaming services. You pay the amount in full each month, therefore establishing credit.
To apply for this card without interest, link your bank account and enter your subscriptions. All you have to do is continuously utilize your Grow Credit card as your payment option to make payments.
All fees must be paid in full by ACH from the bank account associated with your account. They report to all three credit bureaus, which is an advantage. The norm is to report to one or two parties, whereas Grow Credit reports to all three.
If you have a bad credit score or no credit, you can instead apply for a secured credit card.
Set up recurring payments for a few of your subscription services. Link your bank account, so that credit card payments are handled automatically. If you complete all of your monthly payments on time, this is a simple approach to improving credit.
Increasingly, society relies on credit to make purchases and other financial decisions, yet a thin credit file is preferable to a low credit score. It is never too early to begin establishing a credit history by utilizing the aforementioned advice.
As long as your payment history is recorded to the credit bureaus, your monthly subscription services can function as a means of establishing credit.
You may achieve this by using a credit card to pay for your subscription or by enrolling in a service that reports your payments to credit agencies. In either scenario, you'll need to ensure you handle payments for subscription services carefully to create credit.
Routinely review the subscription rates. You'll need to confirm the amount of your automatic payment corresponds to what you're being charged. Check your bank account to ensure there is sufficient money for the payment to be processed on time.
March 23, 2023