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Experian Sigma Credit Score

Posted: 13 Sep 2022

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Experian’s new credit score – Experian Sigma – will go live from October 2022 on My Credit Check. Here’s some information about credit scores and the new Experian Sigma score that you should know.

Experian South Africa’s New Credit Score – Experian Sigma

With the acquisition of Compuscan in 2019, Experian gained the legacy Compuscan consumer information bureau which has been renamed Experian Sigma. The data from both companies have been consolidated into the single Sigma database. This gives you the most comprehensive view of your data and a more reflective score of you as a credit-active consumer.

The Sigma score is a general credit score that looks at the information on your credit report and calculates a 3-digit number that indicates your risk to a lender.

The Experian Sigma Score will go live on My Credit Check in October 2022.

Experian’s Sigma score gives you a good general view of where you stand and how financially healthy your credit report is.

As with all credit scores, Sigma rates your risk according to risk categories. Here are the score categories for Sigma:

  • No score = Not enough data
  • < 599 = Poor
  • 599 - 615 = Below Average
  • 616 - 633 = Average
  • 634 - 657 = Good
  • > 657 = Great

What is a credit score?

A credit score, also known as a credit rating, is a number that reflects the likelihood of you repaying the money you want to borrow. Lenders like banks and credit card companies will look at your credit profile and calculate your credit score based on that information as well as their own, which will show them the predicted level of risk in lending to you.

The higher your credit score, the better your chances of being accepted for credit at the best rates. A decent credit score is essential for you to obtain credit because the higher it is, the less of a credit risk you are. Credit providers also "cost" for risk, which means that you may also be in a better position to negotiate more competitive credit rates if your risk profile is lower.

There are two main types of credit scores, general bureau scores and custom scores:

  • General Bureau credit scores are provided to you by credit bureaus. The score on your credit report is a general guideline for your risk profile. Each bureau has its own scoring calculations and scoring bands, so your score can be different from bureau to bureau. For example, a 650 score at one bureau can be the same as a 400 score at another bureau.
  • Custom credit scores are developed for use by individual lenders. They are unique to the specific business and risk appetite of that lender. They rely on credit reports and other information, such as account history, from the lender's own portfolio to calculate the score. Custom credit scores can apply to specific types of lending, such as home loan lending or vehicle finance.

Credit bureaus develop their own scoring models based on the type of risk factors their clients would typically want to consider. Credit bureaus will often also have more than one credit scoring module, based on the different types of variables that different credit providers want to place a focus on. Having said that, the rule of thumb is that if you have built up longstanding good credit behaviour, you will score positively across all credit bureaus.

While there are different scores, consumers that have built up good credit behaviour should consistently receive good scores across all credit bureaus and credit grantors.

Why change the credit score?

Your current score on My Credit Check is a general consumer credit profile score. This score is specifically designed to give you a good high-level view of your overall credit history.

The new score is more aligned with the type of score lenders would use to determine creditworthiness when applying for credit. The reason for this change is to give you more confidence when applying for credit. The new score is our general credit score, built using more data from two credit bureaus with the most cutting-edge technologies and tools available.

What will happen to my old credit score?

Your old or historical credit score on My Credit Check will be converted to the Sigma score equivalent. That way you will still be able to see the progress of your credit score over time.

This change will not affect your ability to get credit from a credit provider.

How do the bureaus calculate your credit score?

Credit bureaus and credit grantors develop their own scoring models based on the type of factors and variables that are predictive of risk for the specific industry or segment of the population with which they are dealing. This means that there are different scores for a single consumer, depending on the institution from which the score is requested. There is no single score for a consumer in South Africa.

While there are different scores, consumers that have built up good credit behaviour should consistently receive good scores across all credit bureaus and credit grantors.

It's important to note that between bureaus, the consumer score categories have different score ranges (e.g., low risk is 650+ while a medium risk is a score between 500 – 650). A consumer's score could be different, but they could still fall within the same category (i.e. low, medium or high risk) because the score is in a specific range. Similarly, consumers could have the same score but fall into two different categories.

How do you maintain your excellent credit score?

The best way to build an excellent credit score and maintain it is to repay your accounts on time, and the full instalment amounts each month. At the end of the day, being responsible with credit is how you build or maintain an excellent score.

Apart from good payment behaviour, to keep a high credit score you should try control:

  • The total amount of credit you have (the total amount across all accounts and loans). While not impacting scores directly (if accounts are paid timeously), having too much credit, especially if it is maxed out can affect your chances of getting further credit.
    • The amount of credit you spend. Using a high percentage of credit that is available to you (e.g., spending 80% of your credit card limit), especially on many accounts, can start to impact your score negatively.
    • The type of credit you have (e.g., retail cards, vehicle loans, personal loans, etc.). All credit has the potential to build or damage your credit report and score. That said, there are some types of credit that are seen as ‘good’ credit, e.g., home loans and vehicle finance, as these improve the lives and financial status of a consumer. While retail cards, small loans or credit cards can be useful financial tools, having many can affect scores, especially if you don’t pay one or more of them.

If you’d like to know more about your credit score, visit www.mycreditcheck.co.za or contact Experian’s Consumer Care at [email protected]

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