Copyright manchestereveningnews
People will see their credit score take account of rental payments for the first time under a major overhaul being rolled out by Experian. The move is being made with the aim of better reflecting how credit applications are assessed by lenders. The changes will see the consumer credit reporting agency offer a more detailed view of information on reports and a wider variety of methods to improve scores. It includes an expansion of the score range, from 0-999 previously, now up to 1,250. The five bands will also be updated with new names and refreshed descriptions, scrapping "poor" and "very poor" and the use of the colour red to be less distressing to borrowers. More than 40% of people are set to drop down a score banding after the changes, given the expanded scoring. Experian said 42% are also likely to move up a banding, while 14% will see their score band remain the same. The data and technology powerhouse stressed the changes will not impact on someone’s ability to get credit, while eligibility for mortgages , loans or credit cards remains unchanged. The new model will take account of new data, such as rental payments, as well as financial behaviours that banks and lenders increasingly value. This includes cutting overdraft use, avoiding credit card advances and making mortgage overpayments, as well as a more detailed look at regular payments on mobile phone contracts and how often a customer may switch provider. The scoring changes will give people a clearer picture of their borrowing potential and more ways to improve their score, according to Experian. A credit score is a personalised number that lenders use to assess creditworthiness, or how likely a borrower is to repay money. A higher score means borrowers are more likely to get approved for a loan and offered better rates. Edu Castro, managing director of Experian consumer services in the UK and Ireland, said: "The way people manage their money has evolved, and our score has evolved too. "Our new Experian credit score better reflects more of the everyday financial behaviours that matter – like paying rent or reducing overdraft use – offering a clearer understanding of the information on your credit report." He added: "This means people get a more personalised view of how they’re doing financially and more practical ways to improve their score, helping unlock better borrowing opportunities for the future." The new scoring will start to be rolled out this month and will reach all UK customers by the end of 2025, with existing customers seeing their score automatically updated and emailed once available.
