TransUnion is overhauling its consumer credit rating system from next month to include account trends data and how credit cards are used.
The credit reference agency said it will start rolling out a new expanded scoring system from zero to 999, up from 710 currently, rating borrowers from “very low” – replacing the current “very poor” – up to “excellent”.
Broader data set
The group stressed it was more than just a change in the range, with the new score using a broader set of data, such as how account balances have changed over time and how credit cards are used.
It said this was being done “to reflect consumer financial behaviour with greater depth and precision”.
The overhaul is also set to differentiate between consumers with little or no credit history and those with a poor rating, meaning it should be fairer to those newer to credit.
Industry context
It comes after Experian announced an overhaul of its scoring in November last year from 0-999 to a maximum of 1,250.
A credit score is a personalised number that lenders use to assess creditworthiness, or how likely a borrower is to repay money. A higher score means borrowers are more likely to get approved for a loan and offered better rates.
James Robinson, managing director of consumer interactive for TransUnion in the UK, said: “There is still significant confusion among consumers about what credit scores mean, with many believing the score they see is the same one used by lenders.
“Our new score is designed to minimise this confusion by using a broader range of behaviours over time, rather than a single snapshot.
“That fuller picture can help people better understand the positive financial behaviours influencing their score, engage more confidently with their credit health and access the guidance they need to improve it.”
Rollout and impact
TransUnion will phase in its new scoring system from next month until June 2027, with some consumers initially seeing two different credit scores, depending on which app or provider they use.
The firm stressed the information shared with external lenders will remain unchanged and that different score will not impact lending decisions on credit applications. Lenders use a consumer’s credit report alongside their own factors in making lending decisions.
TransUnion added the new scoring will be backed by more than 300 practical tips and personalised insights on how to understand the factors that affect credit profiles and actions to improve it. These will be offered on sites and apps that partner with TransUnion, alongside the group’s own website.
Madhu Kejriwal, chief executive of TransUnion’s UK operations, said: “Our next-generation score is clearer, more transparent, informative, and better aligned with how lenders view consumers today.
“We believe that understanding your credit health is the foundation for confidently making more informed financial decisions.”
