Experian credit ratings ‘misleading’

Brokers say scores from credit rating agency Experian are misleading potential borrowers by rating them as ‘excellent’ when their credit history shows otherwise.

Firms say clients are obtaining ‘excellent’ ratings from Experian when they may end up being turned down for a mortgage, due to factors such as defaults or county court judgments.

Perception Finance managing director David Sheppard says: “Experian should be held to account on this. It creates a false sense of hope in clients’ minds as to their creditworthiness and if Experian cannot grade people correctly then it should stop providing a score, unless it is prepared to lend to these people based on its scores.

“People assume their credit scores will cover their entire credit history and to provide something other than that is somewhat misleading.”

Trinity Financial product and communications manager Aaron Strutt says: “People with 10 missed payments in the last year have been given perfect credit scores, which clearly should not have happened.

“It is a bit of a minefield because lenders all use different credit rating agencies and use these scores as a benchmark.”

A spokesman for Experian says: “The Experian Credit Score is an excellent guide to how a typical lender will assess someone’s credit report and we make this very clear on our website. But it is only a guide. The scores cannot be used as a guarantee that a consumer will be approved for a mortgage.”