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what is experian?
what is experian?

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What is Experian?

Experian is a credit reporting agency in the UK, similar to TransUnion and Equifax. Your Experian credit score can help you determine how lenders view your credit file and how likely you are to get favourable rates when you apply for loans or mortgages.
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In the UK, the average Experian credit score was 797 in September 2022, which is an improvement from 792 the year before. This shows that the average Experian credit score improved. 

Interestingly, people over the age of 55 tend to have higher credit scores while those aged 31 to 35 have the lowest average score of around 770.

Read on to find out what Experian is, how it works, and how your Experian credit score is calculated.

About Experian

Established in 1996, Experian is one of the main credit reporting agencies that review the credit histories of people in the UK and convert them to credit scores.

They do this by collecting information on the debts you have and your payment history, to determine whether you are creditworthy. In other words, the likelihood of  you will likely pay back what you borrow from lenders.

Many banks and lenders in the UK rely on your Experian credit report to determine whether or not they can lend money to you.

What is the Experian credit score?

The Dublin-based company's credit reporting system makes it simple for individuals to determine how successful they are in managing their finances.

Their credit scores are easy to understand and will help you in knowing how your credit profile looks and what rates you may qualify for.

Financially savvy individuals order their credit reports to determine the best steps to take to improve their credit score. It is vital to keep a good credit score with Experian because a low credit score will lead to higher interest rates on loans and credit products.

While the average Experian credit score is around 797 (as mentioned above) you can view a map of the average scores in your area to see how you compare.

How does Experian calculate credit scores?

Experian generates credit scores by reviewing a number of important elements. People will find it easier to understand what they are getting into from a financial standpoint when using their credit scores correctly.

Some of the factors Experian considers when determining your credit score include:

  • Information about your credit history, including identity-verification data.

  • The reasons for a credit application can also make a difference. This entails determining whether a person is opting for more frivolous investments like a store charge card or whether they need a car loan.

  • The ability to pay off debt is demonstrated by a variety of data points. This includes a review of any instances where a payment was made late for any reason.

Experian gathers a tremendous amount of data when preparing information and they are committed to learning as much as it can about each person it tracks and recognises.

What information does Experian collect?

According to Experian, there are 13 factors that determine your credit score. Although they don't specifically list all these factors. some of the data they collect include:

  • General demographics of people

  • Census-related information

  • Property information

  • The debts in your name

  • Court-related information involving your debts

  • Whether or not you make payments on time

A person’s race, gender, ethnic background, and religion are never factored into the process. All decisions are made solely on what one has done with credit in the past and the habits that come about. 

The impression that comes from what investments one tries to get credit for can also make a bit of an impact in some cases.

What is a good Experian credit score?

A good credit score with Experian is one that is above 881. Keep in mind that Experian uses a score between 0 to 999 for your credit score.

Credit scores from Experian can be classified as follows:

  • Very poor: 0-560

  • Poor: 561-720

  • Fair: 721-880

  • Good: 881-960

  • Excellent: 961-999

How often does Experian update?

Experian updates its databases every four to six weeks as they get updates from companies. You can get your free credit report from Experian by creating an account online. 

According to Article 15 of the Data Protection Act 2018 everyone is entitled to get a free credit report from Experian and other credit reference agencies.

Which lenders in the UK use Experian?

Experian is being used by all major banks in the UK, including Barclays, HSBC, Lloyds, Morgan Stanley, Nationwide and Royal Bank of Scotland.

How much does Experian cost?

You can open a free Experian account to view your credit score free of charge and see your eligibility for credit cards and direct lender loans. You can also connect your bank account and see if you can instantly boost your credit score.

Alternatively, you can subscribe to Your CreditExpert for £14.99 per month (with a 30-day trial). You'll get an updated credit score and report daily, along with CreditLock, which is designed to reduce fraudulent credit applications on your name. 

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