Experian, the credit ratings agency, is set to incorporate rental payment history into its credit scoring system as part of a comprehensive reform aimed at enhancing the assessment of credit applications. This initiative will provide individuals with a clearer understanding of their borrowing capabilities and additional avenues to boost their credit scores.
As part of these reforms, the scoring range will expand from 0-999 to 0-1250, offering a more detailed analysis of financial behavior. The updated model will take into account actions valued by lenders, such as minimizing overdraft usage, steering clear of cash advances on credit cards, and consistently making timely payments for rent and mobile phone contracts.
Additionally, Experian will enhance transparency regarding factors that influence credit scores, helping individuals comprehend the impact of various financial habits and empowering them to take actionable steps to improve their financial situations.
Edu Castro, Managing Director of Experian Consumer Services for the UK and Ireland, stated: “As financial management practices have evolved, so too has our credit score. The new Experian Credit Score provides a more accurate reflection of essential everyday financial behaviors, including rent payments and reduced overdraft reliance. This change enables individuals to gain a tailored understanding of their financial health and practical strategies for enhancing their score, ultimately paving the way for better borrowing opportunities.”
The new scoring system is set to begin its rollout in November, with all UK customers expected to have access by the end of the year.