Experian credit score changes: what it means for UK borrowers

If you have checked your credit score recently, you might have noticed it looks very different. Experian, one of the UK’s main credit reference agencies, has been overhauling how its scores work, increasing the maximum score from 999 to 1,250 and changing the labels that sit alongside it.

Naturally, any change involving credit scores is enough to make people nervous. Especially when nearly half of users are expected to see their score or band drop. But before you assume the worst, there is an important thing to remember. Your credit score is not what lenders actually use.

So what’s changing?

Experian’s new scoring system started being rolled out from mid-November last year. According to Money Saving Expert, under the new system, 42% of people are expected to see their score move up or stay in the same band, while 44% are likely to drop into a lower band. The remaining 14% will see no change.

Despite how dramatic that sounds, Experian itself says the changes should not affect your ability to get credit. That is because lenders do not use your Experian score when making decisions. They use the information held on your credit file instead.

In other words, the number may change, but the facts about how you manage credit do not.

What Experian is paying more attention to

If you are applying for a loan, mortgage or credit card this year, it may be worth knowing why Experian has made the changes. They say that the updated scoring system is designed to more closely reflect what lenders are already looking at. That includes everyday financial behaviour such as mobile phone contract payments, use of overdrafts, cash withdrawals on credit cards, mortgage overpayments and rental payments.

On rental payments, Experian says tenants will need to opt in for these to be counted. A spokesperson described the move to the BBC as: “Great news for renters who are paying on time, every month.”

However, it cuts both ways. Missing rent payments could also have a negative impact on your score.

Kinder labels but bigger numbers

Another noticeable change is the removal of the old “poor” and “very poor” bands. Experian says these labels were discouraging, so they have been replaced with Excellent, Very Good, Good, Fair and Low. The use of red warning colours has also been dropped.

That may feel like a softer approach, but the underlying message remains the same. A score is a guide for lenders, not a verdict.

Here's what the new Experian scores look like:

To complicate things further, Experian is just one of three credit reference agencies. Equifax and TransUnion use completely different scoring systems, with different maximum scores.

And remember, even with a perfect score, lenders will still look at affordability, income and your existing relationship with them. Credit reference agencies do not know how much you earn, and things like student loans are often not shown either.

Market conditions also matter. Sometimes being declined has less to do with you and more to do with what lenders are looking for at that moment in time.

Making sense of your new score

A changing credit score may seem unsettling, especially if it moves in the wrong direction. But this shake-up is more about how information is presented than a sudden judgement on your financial behaviour.

If your score has dropped without a clear reason, it is still worth checking your credit report for errors or signs of fraud. Otherwise, the usual rules apply. Pay bills on time, keep borrowing manageable, and remember that the number on the screen is just one small part of a much bigger picture.