Tenants who report their rental payments will now see these fully integrated into their credit scores, it has been revealed.
Experian, which is one of the UK’s main credit score providers, says the next version of its scoring system will include rent payments, a move that has been backed by the Government and welcomed by the UK’s largest rent payment platform, CreditLadder.
John Webb (main image), Experian’s Senior Consumer Affairs Manager, says: “Our credit scoring model has been updated to reflect how lenders assess creditworthiness today, incorporating new types of financial behaviour like rent payments and overdraft reductions.
“This means tenants who share their rental data with Experian can see a positive impact to their credit score. Although not all lenders use rent data yet, it demonstrates the positive financial behaviours many lenders value.”
Tenants who share their rental data with Experian can see a positive impact to their credit score.”
The rent payments that have already been reported to Experian are currently visible on users’ credit files, but in the next version of Experian’s credit scoring system, rent will be fully integrated into the score calculation. As part of this broader update, Experian is also restructuring its overall scoring model.
Granular
Experian’s score range has been expanded from 0–999 to 0–1250, allowing for a ‘more granular breakdown of financial behaviour’.
This will help tenants understand how banks and lenders interpret their credit report and what actions can positively impact their score.
The new model recognises behaviours that banks and lenders increasingly value such as reducing overdraft use, avoiding credit card cash advances, and making regular payments on rent and phone contracts.
Experian’s new score will begin rolling out now and will reach all UK customers by the end of the year.
Existing customers will see their score automatically updated during this period and will receive an email once their smarter Experian Credit Score is available.
Read more: Second lender accepts rental payment history for mortgages
