Paying your rent punctually may soon enhance your likelihood of securing a credit card or mortgage, as Experian is revamping its credit score system to include more positive financial behaviors. The new model will recognize actions like reducing overdraft usage, avoiding credit card cash advances, and making regular phone contract payments.
Tenants will need to opt in for their rental payments to be factored into the scoring, with missed payments having a detrimental impact. The scoring scale will expand from 0–999 to 0–1,250, eliminating the “poor” and “very poor” categories and the color red, and introducing new bands named Excellent, Very Good, Good, Fair, and Low.
Over 40% of individuals are expected to shift score bands due to the updated scoring range, but eligibility for credit products such as mortgages and loans will remain unaffected. Experian will provide guidance to assist those in lower score bands to improve their credit standing.
The new scoring system will be gradually implemented starting in November, reaching all customers by year-end. It is important to note that credit scores vary among agencies like Experian, Equifax, and TransUnion, each using its own scoring method. Lenders consider these scores alongside other factors like income when evaluating loan applications.
Edu Castro, Managing Director of Experian Consumer Services, UK & Ireland, stated, “Our new Experian Credit Score aligns with modern financial habits, reflecting actions like rent payments and reduced overdraft usage. This offers a clearer picture of one’s financial behavior and provides actionable steps to enhance credit scores for better borrowing opportunities.”