Credit referencing agency Equifax has revamped its scoring system as part of a huge shake up of how it rates you.
Equifax is one of the three main credit reference agencies alongside Experian and TransUnion, and is used by lenders to assess your ability to borrow money.
For example, banks and other creditors will check your score on these websites to decide whether you can take out a loan, mortgage or another financial commitment.
The revamp from Equifax will see its ”very poor” rating scrapped in favour of a new ”very good” category.
People will be ranked either “poor”, “fair”, “good”, “very good” or “excellent” based on how high their credit score is under the changes.
Under the old system, users were scored out of 700 - but now the rating now goes up to 1,000.
Previously, a "very poor rating" was between zero and 278, while "poor" was from 279 to 366.
With the new scale, a "poor" rating is between zero and 438 points with the next barrier being "fair", which is from 439 to 530 points.
An "excellent" rating on the old Equifax scale was between 467 to 700, while on the new one it is 811 to 1,000.
The new Equifax credit system will create a completely new score for you.
For example, if you had a score of 467 previously – in the "excellent" band – a spokesperson for Equifax says it is likely your score will increase to somewhere between 811 and 1000 and therefore remain in the excellent band.
There isn’t a universal credit score for every person.
Instead, each lender has its own checks when deciding whether or not to accept you as a customer - they may check just one, or all three of the major agencies.
Experian has a credit rating scale of between zero and 999, while TransUnion goes up to 710.
Both Experian and TransUnion have a “very poor” category but they don’t rank scores as “very good” like Equifax.
The credit referencing agency had previously said its new system would create more accurate credit scores.
How Equifax is changing its credit score scale
Here is how the old Equifax credit score scale looked, and how it works now:
Old scale:
- Very poor - 0 to 278
- Poor - 279 to 366
- Fair - 367 to 419
- Good - 420 to 466
- Excellent - 467 to 700
New scale:
- Poor - 0 to 438
- Fair - 439 to 530
- Good - 531 to 670
- Very good - 671 to 810
- Excellent - 811 to 1,000
