Paying your rent punctually may soon enhance your eligibility for acquiring a credit card or mortgage, as Experian is revamping its credit scoring system to consider more positive financial behaviors individuals exhibit in their daily lives.

Apart from rent payments, commendable actions such as reducing overdraft usage, avoiding credit card cash advances, and making consistent phone contract payments will also be acknowledged in the new model.

To have rental payments factored into the score, tenants must opt in, with missed payments exerting a negative impact on the credit score. The scoring system will now range from 0–1,250, eliminating the “poor” and “very poor” categories in favor of new designations such as Excellent, Very Good, Good, Fair, and Low, replacing the color red.

More than 40% of individuals are anticipated to shift score bands due to the expanded scoring, with 42% likely to move up a band, while 14% will maintain their current band. However, eligibility for credit products like mortgages, loans, or credit cards will not be affected by these alterations.

Experian will offer guidance and recommendations for enhancing credit scores for individuals in lower bands. The updated score will be phased in starting November and will be fully implemented for all customers by year-end. It is important to note that credit scores differ among agencies like Experian, Equifax, and TransUnion, each utilizing its unique scoring system.

Lenders typically consider a blend of credit ratings and other factors like income to evaluate approval for financial products. Edu Castro, Managing Director of Experian Consumer Services, UK & Ireland, highlighted the evolution of financial management and the corresponding evolution of the Experian Credit Score to mirror contemporary financial behaviors for a clearer understanding and personalized insights to facilitate improved financial prospects.