Can your Netflix or Spotify subscription help you get a mortgage?

Homebuyers with subscriptions to entertainment services such as Netflix or Spotify now have an increased chance of securing a mortgage with Leeds Building Society.

The lender has become the first UK mortgage provider to start using payment data recorded by Experian's open banking tool, Experian Boost.

Regular debit payments that don't normally appear on credit files will now be taken into account by the lender when considering home loan applications.

Here, Which? looks into how Experian Boost works and what other methods you can try to improve your credit score.

What is Experian Boost and how does it work?

It is a free add-on tool run by credit reference agency Experian. 

By giving Experian permission to access your accounts,, Boost assesses real-time banking information - none of which is traditionally factored into credit scores.

The last 12 months of regular debit payments - such as council tax, savings and investments, and subscriptions to services like Netflix, Spotify and Amazon Prime - are factored in to boost credit scores. Those with a good financial track record can therefore benefit.

Experian says no credit scores are ever reduced as a result of Boost.

• Find out more: sharing your financial data with open banking

Leeds becomes first mortgage lender to sign up

Experian Boost launched four years ago, however, until now, no UK lenders used the data pool when considering a mortgage application. 

Leeds Building Society has now partnered with Experian and connected to its Experian Boost service. 

The building society's chief executive, Richard Fearon, said: 'This will particularly help younger borrowers, first time buyers and anyone on lower incomes who face the toughest challenge to prove their ability to repay. 

'Often through no fault of their own, these groups can struggle to build a good credit score because they need to spend most of their earnings on rent and other regular payments.'

• Find out more: best UK mortgage lenders

Does your credit score really matter?

If you have a low or 'bad' credit score, you're more likely to be turned down when you apply to borrow money, or offered less favourable interest rates. 

Those who've never borrowed money before, might assume they have a good credit score, but this is unlikely to be true. That's because when assessing your application, lenders look for evidence that you'll be able to pay back what you borrow - so having no record of successful repayments can count against you.

Having a 'thin' or non-existent credit file makes you invisible to the financial system. This is unfavourable to lenders, and you may find that you're turned down for a home loan - especially one at the cheapest rate - even if you could comfortably afford to pay it back.

• Find out more: how to check your credit score for free 

What's a good credit score rating?

Each of the UK's three main credit reference agencies - Experian, TransUnion and Equifax - have a scale for what it considers a 'good' or 'excellent' credit score.

The table below shows how the banding for Experian works. The average credit score achieved by borrowers is 797.

Although it can help to have a good or excellent credit score, it's not a guarantee that all lenders will extend credit to you or treat you in the same way.

Each lender has its own system for deciding whether or not to lend to you, so you could be rejected by one but accepted by another.

How much difference does Experian Boost make?

When Experian Boost is added, the average increase is an extra 24 points. 

The maximum score boost is 101 points - which can take you over two credit score bands. It can therefore provide an additional layer of information, potentially tipping the scales in favour of some borrowers who may have otherwise been rejected. 

During testing, Leeds Building Society said 7.5% of its mortgage applicants would have gained an improvement in their credit score by using Boost.

• Find out more: credit reports - all you need to know

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Other ways to improve your credit score

Unless you want to get a mortgage with Leeds, no other lender currently takes Boost credit scores into account when considering home loan applications.

Therefore, you might want to try other methods of improving your credit score. These include:

• Making sure you're on the electoral roll: it may sound simple, but lenders use the electoral roll to confirm your address for any credit applications, so if you're not registered you might find it hard to get accepted for products. 
• Using a credit-builder credit card: credit-builder cards are designed for those who aren't eligible for mainstream credit cards because they have a poor credit score, or no credit history. They have lower limits, higher interest rates, and fewer benefits than other credit cards, but they will allow you to build your score over time with responsible borrowing and regular repayments.
• Keeping your credit usage low: aim to use no more than 50% of your available credit, to show prospective lenders that you're effectively managing your current budget.
• Making the most of your rent payments: private, council and social housing tenants can have their record of regular rent payments added to their credit report via rent reporting platforms. This can help tenants show lenders they are capable of paying important bills on time.
• Ending financial associations with ex-partners: if you opened a joint current account with an ex-partner whose credit rating is worse than yours, banks may also look at their credit rating when you apply for a product. If you're no longer together, make sure you ask all credit reference agencies to break this financial link.

Find out more:  16 ways to improve your credit score