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New scoring system affects millions of borrowers across Wales and the UK

A MAJOR overhaul of the way credit scores are calculated is being rolled out this month, with Experian announcing sweeping changes to how lenders assess borrowers. For the first time, rental payments will be included in credit score calculations, meaning tenants who consistently pay rent on time could see an improvement to their overall score. The update is part of Experian's move to "better reflect modern financial behaviour," taking into account regular bills, mobile phone payments, and overdraft use.

Expanded scoring system

The company is also expanding its credit score range from 0-999 to 0-1,250, giving lenders what it calls a more detailed picture of consumers' financial habits.

The five score bands -- previously labelled from "very poor" to "excellent" -- will be renamed, with Experian dropping negative colour coding such as red to make the system "less distressing" for users.

Although the changes are not expected to affect people's actual eligibility for mortgages, loans or credit cards, more than 40% of people are likely to move down a band after the recalibration, while around 42% will move up.

Everyday spending patterns

As part of the update, Experian will start to recognise behaviours that lenders increasingly value, including cutting back on overdrafts, avoiding cash advances on credit cards, and making mortgage overpayments. Other data such as mobile phone payments, broadband subscriptions, and switching frequency between providers will also be factored in. Edu Castro, Managing Director of Experian Consumer Services UK & Ireland, said: "The way people manage their money has evolved, and our score has evolved too.
Paying rent on time or reducing overdraft use are now meaningful indicators of good financial management."

Automatic updates

The new system will be introduced gradually from November 2025, with all UK customers expected to transition by the end of next year. Existing users will see their updated score automatically reflected in their accounts. A higher score generally means access to better borrowing rates, while a lower score can affect the ability to secure credit.

Experian said the update aims to give people "a clearer understanding of their financial position and more ways to improve it."